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Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?

To: Cosmo Kramer who wrote (2530)	2/7/1998 6:43:00 PM
From: steve goldman	Read Replies (2) \| Respond to of 4969

Mark, BAAT...to be honest, never heard of it before, but the action you described is well known of penny stocks. They are less liquid and are often the breeding ground of less moral market makers. How do you think the person who paid $3.25 for stock felt seeing it at .62 shortly thereafter? How do you think the market makers who sold that $3.25 stock felt? tale of two worlds. For the most part, I strongly recommend that investors avoid penny stocks as they are mostly stories headed to zero. For those interested in playing them, diversification, like any investment strategy, is important. YOu need to play enough so that if 9 out of 10 lose, the 10th wins and you net positive. Think of it like roulette at the casino where you have a large stack of $1 dollar chips and you have to spread them around so if you hit a number your 17:1 (i think) odds pays you what you lost spread around the rest of the table. I hve seen people make tons wiht pennies. I own some yet I don' just throw my money at anything. I do research, analysis and say "hey, this stock absolutely stinks, big time, has tons of debt and is about to fall off the face of the earth....but I think the story is compelling enough that if just a few things come into line, my 50 cent investment might make it to $5 or $6 in a few years. Nonetheless , I am totally prepared and able to withstand seeing it in multiple decimals like .0123 or .00 or flat out disappear from the face of the earth and it won't effect my standard of living or my family. I consider pennies the total crap portion of my portfolio. With that disclaimer said, you initial impressions of what could hve happened are probably dead on, but you never know. There used to be a small, crappy $1.25 stock called Iomega that went from $1.25 to about 50 in a short period of time. A stock called zitl went from $2 to 72 in no time at all. But be careful, these are no Warner lambers and GE's.. Regards, Steve@yamner.com