How to Make Money in a Penny Stock Promotion

Most people lose money when they invest in penny stock promotions. However, you can make a significant amount of money if you look at these stock promotions in the same way that a professional gambler views a blackjack table or a roulette table. There are promoters that move stocks on a regular basis. It’s important to realize that these moves are short lived. Each stock promoter has a limited amount of influence and therefore, you must play their wave of influence and nothing more. Your plan must be disciplined and specific. Please note that stock promoters will only promote you into the stock. They won’t promote you out of the stock because they’re not paid to do that.

Here’s a simplified evolution of a stock promotion. A new promoter or a multitude of stock promoters latch onto a new company. They send out thousands of emails telling everyone that the stock price is going higher. Typically, you’ll get first responders. These are the people that buy immediately based on a stock promotion regardless of the initial jump in price. The initial jump in price could be defined as the opening price when a promotion first begins. Then, they continue to pump a stock and they’ll attract secondary responders. These are the investors that take a ‘wait and see approach’ or ‘I’ll watch it’ approach. They buy and within 2-3 days, the move created by most of these promotions is dead. So the motto is, “Get out or you’re dead.” As the third day approaches, the promoter loses his influence power (this is his audience) and people begin to take profits. Then, some people that have been holding onto the stock decide to sell because they’ve been holding for a long time (probably with a loss). Now, the people that bought the stock with the anticipation of the stock doing what the promoter said and now they see the price decline panic and they sell. Add in some naked (very short term) shorts and some panic sellers and typically, a stock promotion will always cause a stock price to decline to a price lower than you bought in at.

Promoters such as THE CAPITAL REPORT.com typically cause stocks to move 20-40% on the first day. It may not be too late to buy because the stock moves could last 2-3 days and in most cases, that’s it. Therefore, you need to play a stock promotion like a professional gambler plays a blackjack table. If the world’s best blackjack player goes to the table with $100 with $20 minimum bets and stays at the table for 12 hours playing every hand, that player is almost guaranteed to go broke. If you buy a promoted stock with a buy and hold strategy, you’re almost guaranteed to lose most of your money. In the world of penny stocks, there are very few sole survivors.

Investing in penny stocks is incredibly risky and therefore, don't even think about it unless you can lose all your money.