If you spend any time researching the companies that you are thinking of trading stock in, I’m sure you’ve seen the advertisements, the pop-up windows and the e-mails informing you of different websites that will give you alerts on penny stocks that they believe that will make you some great gains.
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The only problem that I see with that is you really don’t know the person who is running the website. Quite a few of them are actually fund managers that use you to help pump up the price of the stock to help them make more money. Of course I’m not saying that all of them are like that but you need to be aware of you might be dealing with.
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I myself subscribe to many different alerts from websites just to see what is going on. In many cases I watch their picks to see if they are going to be right or wrong. Unfortunately many of the picks don’t really go anywhere after the initial jump. How I see it, many of these website/traders position themselves in a company, start hyping it up that it will do great for their readers/subscribers. As the price goes up they start scaling out their position. Most of the stocks that I’ve been watching over the last two months from these alerts would have lost me thousands of dollars. Don’t get me wrong, I would have made money on some of the picks, but not as much as I would have lost.
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The latest stock that I’ve seen being pushed is Biocentric Energy Holdings (OTC:BEHL.PK). I saw this being pushed by several different websites. I figured that this too would be another pump-and-dump fiasco as I’ve seen before. The stock price was $0.023 per share when I first received the alert, after three positive days where it went to $0.07 I was waiting for the price to fall. To my surprise, it still hasn’t started to lose momentum. As of this morning, the price per share was to to $0.14, a gain of over 500% in just a week or so.
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I’ve talked about it before and said that buying penny stocks can be very rewarding, but at the same time you can lose a ton of money. Be careful when you trade penny stocks, even more so than you would with bigger cap companies.

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Back in October 2008 I wrote a post about Federal Agricultural Mortgage (NYSE:AGM). At the time the stock price went up by over 350% in just one week. Well the stock fell back down to it’s pre-spike price during the next three weeks, where it’s pretty much has been since then.
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Until Tuesday morning where it started it’s 113% price gain. That’s right the stock jumped after the earnings report was released showing that they’ve steered the company around to post a net income of $33.5 million or $3.31 per diluted share. What makes it interesting is that there are no analyst covering this company. As per Yahoo Finance.com, there is no info available for AGM.
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The main reason for such a great quarter was driven by the financial derivatives along with the trading assets.
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What I will say is that most of the gains in the share price happened before the markets even opened. Needless to say that means that most average Joes didn’t see much profits unless they jumped in the stock before the close of Monday trading hours. I you jumped in a the opening of the markets you would still have made over 7% with the trade. Typically a stock will continue on momentum for the next day or two, so don’t try to chase this stock since most of the gains have already happened. I may be wrong and it could take another good jump in price, but I wouldn’t recommend it. Especially since the financial sector took a beaten today and will most likely continue for the rest of the week.
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*DISCLAIMER* At the time of this post, I do not have a position in AGM.

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This past week has been great for profits in the stock market, but only if you get out before the momentum stops and the prices come back down from the profit takers. After the DOW fell below 7000 in the last month, there hasn’t been much of a bright side to making money in the markets unless you’ve been shorting stocks. Of course of you don’t have a margin account, you’re not able to short stocks.
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In the past week there has been great gains a many of the stocks that were beaten up during the fall of the DOW. The only way for you to hold on to those gains is to sell. If you don’t take your profits, then you didn’t gain anything if the prices fall again.
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With what’s going on in Washington, it stands to reason that the upward movement that we’ve just experienced in this week, is just a temporary one. Capitalism is under fire with all the spending that is going on in the government. Many companies are laying off people and it will continue throughout the rest of this year. Even though Caterpillar has announced today that they will be hiring back many of the 2,400 employees that were recently laid off, there are other companies that are not in the same position as them. Caterpillar will be involved in many of the infrastructure contracts that will be created by the stimulus bill.
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If didn’t get into Caterpillar when it fell below $22, then you missed out on some of the great gains that the stock has made. It’s not too late to buy into Caterpillar even at the $26 range. I expect good things for the stock over the next year.
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As for other stocks that have made some good moves over the last week, Sirius XM Radio has moved from their recent low of $0.05 in the latter part of February to where it sits now at $0.3362 per share. I’ve talked about Sirius in the past and still favor the company to come back from their near extinction. With it great move of 43% just today, I will be taking some profits and look to get back in on a pull-back.
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Remember to be aware that the turmoil is far from over and there will be pull-backs on most of these stocks that have had momentum gains. Trade carefully and don’t be greedy.
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Happy Trading.

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Everybody wants to trade penny stocks. The reason for that is that they have the reputation of having big percentage gains (or losses) in any given day. You can make (or lose) a load boat load of money real quick.
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A list of penny stocks can be found almost anywhere on the internet. Why not, these companies need to raise capital so they can expand their business or even to buy the needed equipment so their company can grow one day be one of the big dogs. There are so many penny stocks out there that are traded everyday, but where are they list? On which board do they trade?
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Most of these stocks are traded on the secondary boards, OTCBB (over the counter bulletin board), Pink Sheets and a few others.
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The main reason that they are so popular is because they are cheap enough where the average person can afford them. How cheap? Well, a stock is considered a penny stock when it’s price per share is less than $5. Many of them are actually less than $1 (they really are penny stocks).
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Just because they are that cheap doesn’t mean that you’ll make a ton of money. Some of these stocks will sit at those levels for months and in a few cases, years. Many amateur traders or newcomers feel that these stocks are on their way up and also feel they can’t get any cheaper. That can’t be further from the truth. If you look around on some of these lists of penny stocks, you will see some even trade in what is referred to as sub-penny. Stay away from these types of stocks. Only one out of thousand will ever get out of this range.

If you want a list of penny stocks, go to Yahoo Finance and type in pink sheet or OTCBB, you will get a list of stocks that you can pick through. Be careful and do your due diligence on the company before investing.
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P.S. Want to learn more about the stock market? take a free two week trail with Jim Cramer from TheStreet.com

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For those who believe in alternative energy and expect big things from the industry may have to hold on a little longer. Throughout this week T. Boone Pickens has been going around speaking at events as well as being interviewed on CNBC on Wednesday saying that because of the credit crunch, his big plans for huge wind farms will be delayed.
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The financing just isn’t there and with falling prices natural gas that are used in power plants as well as oil prices hitting levels that haven’t been seen in over a year and a half are making his projects less economical.
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As I’ve writen before here on this blog, Pickens started a campaign to help the U.S. reduce their need for foreign oil. The plan is for major investment in the wind energy and the conversion of natural gas for vehicles
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He has said that this is just a temporary setback due to the financing of the project. When he spoke with the New York Times he was quoted in saying. “When we were looking at the project, we felt like we could do it with 30 percent equity and 70 percent debt.” The 70 percent debt is where we’re having a little slowdown.”
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Mesa Power, a company that he founded was given the job to oversee the massive wind farm in Texas that would be able to power over 1.3 million homes. The company has placed the orders for the first phase of the project. A total of 667 turbines from General Electric will be able to generate 1,000 megawatts of electricity that will power more than 300,000 average homes.
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Originally that part of the project was to go online in early 2011.
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This is just part of what we’ll see for the next several months with the condition of the credit crisis. So buckle up, it’s going to be a bumpy ride.

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