Day 5: Why Small caps Are BETTER Than Penny Stocks And Why I Do NOT Recommend Penny Stocks
Dear Reader,
Alex here.
I hope you’re as excited as I am about the upcoming training How to Build the Perfect Fed-Proof Portfolio on Wednesday at 1 p.m. ET.
Can’t wait to see you there!
But before we get to the big day, I want to emphasize one very important thing.
Yes, this event is focused on small cap stocks.
But, let me be clear… this event is NOT about penny stocks.
Now, you might ask…
“Alex, what’s the difference between penny stocks and small caps?“
Well, there’s a big difference.
And let me start by saying… I do NOT recommend penny stocks. Ever.
And here’s why.
Penny stocks are like lotto tickets.
They’re usually companies with no sales.
Without a great product.
Unproven leadership.
They are unprofitable, illiquid and easily manipulated.
As Barron’s writes, “Investors should avoid ‘penny’ stocks, which have very small market values and don’t trade on exchanges. The companies often have no real business, and the stocks are both volatile and hard to trade.“
In short, penny stocks are usually good for one thing and one thing only…
Losing money.
In fact, look at some of these recent reports…
“Investing in Penny Stocks Has to Be the Dumbest Thing on Wall Street”
– TheStreet
“Penny stocks have become a breeding ground for pump-and-dump schemes that artificially inflate a holding’s value before selling out. The fraudster turns a huge profit, but the investor is often left with nothing.”
“Avoid Penny Stocks at All Costs”
– U.S. News & World Report
“Investing one’s hard-earned money in seemingly ‘dirt cheap’ penny stocks can, and often does, send an investor to the poor house.”
“Penny Stocks Are a Bad Move”
– The Motley Fool
“Small stocks can offer opportunities for big rewards. But with really small stocks – also known as penny stocks – the risks involved often outweigh any benefits.”
To sum up… I wouldn’t touch penny stocks with a 10-foot pole.
Small and microcaps, on the other hand, are a totally different story.
They are completely different from penny stocks.
For one, they aren’t pipe dream companies with no sales.
Small caps are the types of “small stocks” that “can offer opportunities for big rewards,” as the aforementioned article stated.
You see, while penny stocks are often bogus companies with no product or sales…
microcaps are actually great little under-the-radar businesses.
They have breakthrough products.
Sales are rising quarter after quarter.
They are expanding into new markets and boasting big profit margins.
In other words, microcaps are those great little stocks destined to become midcaps… then large caps… or be bought out along the way (potentially resulting in a hefty premium in your pocket)…
They are like penny stocks in that they are super cheap…
But they are unlike penny stocks in that they actually give you a very good chance at real and lasting returns on your money.
That’s a big difference!
For example, I recommended a small cap company called ImmunoGen in a special report I released on May 2 earlier this year.
At the time it traded for around $5 with a market cap of under $2 billion.
So it was a small under-the-radar company.
But it wasn’t a penny stock.
It was a great company with a breakthrough new medical treatment.
Here’s just a small piece of what I wrote in my special report:
“ImmunoGen’s first Antibody-drug conjugate (ADC), Elahere, which targets ovarian cancer, was recently granted accelerated approval by the FDA, making it the very first and only ADC approved to treat ovarian cancer.
It’s actually the first new drug to treat ovarian cancer in nearly a decade.”
Because of that drug, revenue exploded.
The next day after I released my report, the stock became the biggest gainer in the entire market… with a 144% gain.
And since then, its gone on to even bigger heights.
On November 30, just days ago, it was bought out by AbbVie in a $10 billion buyout.
The stock is now trading at almost $30 – a near 500% return in just 6 months.
Clearly you can see ImmunoGen wasn’t some penny-stock pipe dream.
This was a fast-growing, profit-packed SMALL CAP on its way to the top.
And at our event, I’ll show you the best way to target these kinds of stocks.
Now is the perfect time to targes these stocks.
As Ed Clissold from Ned Davis Research has pointed out…
“small caps are trading at near their steepest discount on record.”
And according to the Stock Traders Almanac, small caps tend to outperform large caps the most starting in mid-December and running into February.
But its not just short term.
Over the long term, small cap value stocks are the single best performing asset class by far.
The American Association of Investors did a study over 92 years.
And they found that small cap value stocks turned every $1,000 into $88 million… compared to just $6 million for large caps.
That’s around 13 times more money.
That’s why I can’t wait for you to attend my small cap training How to Build the Perfect Fed-Proof Portfolio.
You’re going to discover so much…
- I’m going to reveal my entire small cap-picking strategy to you.
- I’m going to detail three stocks that could quickly 10X your money.
- And I’m going to share the most important trigger that tells you down to the exact week when to buy any small cap stock.
This truly will be the greatest wealth-building event of the millennium.
And I’ll see you there on Wednesday at 1 p.m. ET.
Sincerely,
Alex
P.S. Tomorrow is the big day.
So I’ll send you a message from our beautiful set near the nation’s capital. I’ll give you last-minute updates before the training begins on Wednesday.
So just keep your eye on your email.
P.P.S. If you’ve missed any messages from George Rayburn or me this week, you can go back and explore the whole series of communications at…
https://fedproofportfolio.com/
We’ve posted all the articles there so you won’t ever miss one.
I look forward to seeing you on December 13!
Lastly, we’ve created an easy way for you to remember not to miss it… Simply add it to your calendar here:
Add event to calendar