Tuesday, September 15, 2009

Investing in "cheap" stocks

Investing in cheap stocks, or stocks under 1 dollar per share, is indeed risky, but sometimes it is worth the risk. A few years ago I invested in Calpine Energy the symbol at the time was CPNLQ. I bought it at around .23 and sold it around .50, I made a nice little chunk of change, but I continued to keep an eye on Calpine. It went all the way up to over 4 dollars a share, I was really kicking myself for not holding on to that one. Even though the company was going through financial troubles, the stock price continued to rise. It has been a habit of mine for a while now to look for stocks priced under a dollar, and go from there. It has payed off more times than not, you just have to do a little research on the company first. If a company is down on its luck, but has great potential for rapid success in the near future, I buy, buy, buy. I still like energy stocks, most of them are companies that have been around for a while and now how to run their business. Just because a company is down, certainly isn't a reason not to buy. Look at Sirius XM Radio and Ford, they were both way down, facing financial trouble, and now they are both on the way back up. If they reach the prices they were trading at before the downfall, I for one, will have made enough to take a nice family vacation (even after taxes).

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