Dealing in penny shares

grey_gym_sock

N1AK wrote: »

you won't see a FTSE 100 company increasing in value by a couple of orders of magnitude in a few years.

true, but you might see 1 increasing by 1 order of magnitude over, say, 20 years. how quick does it have to be? when is the next race at kempton?

CLAPTON

marathon_man wrote: »

Jegersmart - I have no problem coping with such responses although the tone used was certainly unwarranted.

sadly we live in an age of spin where presentation takes precedence over substance.

jimjames

N1AK wrote: »

Penny shares are the only way to 'get rich quick' by share dealing because you won't see a FTSE 100 company increasing in value by a couple of orders of magnitude in a few years.

Isn't ARM a FTSE company?

Also admittedly not on the FTSE but Apple has increased by several orders of magnitude in under 3 years.

$88 in 2009, $670 in 2012 although dropped back recently.

sabretoothtigger

Here is a listing of stocks http://www.stockchallenge.co.uk/ftse.php

Also you should enter that competition

you won't see a FTSE 100 company increasing in value by a couple of orders of magnitude in a few years.

We've certainly seen the reverse. Fresnillo went from 99p to £20 recently
Cairn had massive growth

iii.co.uk tends to favour the small private investor and so little companies.

Penny stocks is a USA term. They rate all stocks by the Dollar but we trade ours all in pennies so every stock is pennies here.
Over in USA they do define company size by price much more, the DOW is stacked by price I believe.

FTSE is not dependant on price, the biggest stock could be 1p only but it would have a heck of alot of shares.
Have a look at RBS, they were 20p and very big, now they are 200+ and the same size but with 10x less shares

FTSE goes by market cap as per the link above

The largest penny stock is Lloyds bank at 43p but £31bn total and the smallest pound stock is Sinclar William holdings at £1.29 but only £22m total

Anyhow the perception remains hence the RBS move. Lloyds should follow suit and Im sure it'd be 600p within a year on everyones belief it was worth more now

melbury

I had a phase of buying penny shares some years ago and every one was a dead loss, so now only buy "proper" ones;)

The rot usually started with a consolidation of the shares where I ended up holding say 100 instead of 1000, but with the assurance that they were worth just as much. The usual scenario was that after a while the share price of the 100 was the same as the 1000 and then usually just vanished altogether or ended up with about 5 shares:mad:

I suppose there are a few lucky people who get the odd successful penny share, but it really is a case of buyer beware and you have to be prepared to lose out.

N1AK

jimjames wrote: »

Isn't ARM a FTSE company?

Also admittedly not on the FTSE but Apple has increased by several orders of magnitude in under 3 years.

$88 in 2009, $670 in 2012 although dropped back recently.

I don't know however ARM certainly wouldn't have been a FTSE 100 company 5 years ago (when you'd have had to buy to profit) and they are still worth the same now as they were in 2001.

As to Apple, who are a better example, yes they have grown well but they haven't managed a single order of magnitude increase. For clarity an order of magnitude is the difference between £1 and £10, between £20,000 and £200,000 (the value increases by a factor of 10). Apple shares managed about 0.8 if you bought at the 2008 bottom and sold at the 2012 peak.

Is that good performance? Very for a large company and it would still only turn £1,000 into £8,000 which isn't exactly a lottery win. If you bought £1,000 in £0.01 shares and they increased to £0.25 then you'd have £25,000. It's unlikely to happen and I wouldn't suggest trying it; however that doesn't change the fact that small company shares (often very low value high risk) behave differently to established firms.

Jegersmart

marathon_man wrote: »

I don't need to save up to £1,000 or £5,000 .

I don't mean that you have to increase your savings, I meant that if you do not have £1000-5000 in disposable income right now then you may need to combine the current £100 with further multiples over time so you can start at a realistic level, because starting with £100 is totally pointless. Sorry for the confusion.

J

Jegersmart

CLAPTON wrote: »

sadly we live in an age of spin where presentation takes precedence over substance.

So you are rude, hostile and angry to almost everyone on here (unless they agree with you) and you justify it with the above?

Nice.

J

marathon_man_3

Jegersmart wrote: »

I don't mean that you have to increase your savings, I meant that if you do not have £1000-5000 in disposable income right now then you may need to combine the current £100 with further multiples over time so you can start at a realistic level, because starting with £100 is totally pointless. Sorry for the confusion.

J

That is Ok.
I do have immediate access to £1k to £5k (and, thankfully, more) right now but choose only to play around with £100. I will find it of interest looking at various company reports, accounts and projections in starting this and it will merely be for fun. There is no way that I will expect to realistically make any money from it. I could place £100 on a horse or spend it buying lottery tickets and not get a thing back in return so this is a longer-lasting exercise for me and, in my retirement years, helps to keep my brain-box ticking over.

Freecall

This about sums it up

http://en.wikipedia.org/wiki/Penny_stock