Hypothetical situation:
Given the following:
1. You are given $10,000 cash to invest.
2. You know there are alot of good expensive companies.
3. You know there is alot of BS companies.
4. You understand going long and going short a short.
Scenario #1:
You do some research and find a $1 "good" stock and buy
10,000 shares, now ALL your money is in this stock.. Yikes!
The stock market GOD is with you and your stock soars to $10 bucks,
now you have $100,000 bucks, $90,000 PROFIT !!!! WOO HOO !!
Scenario #2:
You do some research and find a loser $10 stocks and short
1000 shares ($10k worth). The stock market GOD is with you
and your stock tanks to $1 buck, cover your short, $9,000 profit !!
WOO HOO !!
$90,000 for going long vs. $9,000 going short, same 9 point
move in the stock. Which scenario do you like ? Granted, finding
a good $1 buck stock is not easy, probably easier to find
a $10 dog..
Pirate
P.S. I don't like penny stocks, 2 of 3 I played were winners,
one (FTEL) went from 62 cents to $10 bucks in 1.5 years and
back down to $1, now $4 plus or minus.. It is possible...
(sold after tripling my $$$ bahh!! missed the 10 bagger)
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