Penny Shares

The book I read to research this post was Penny Shares For Dummies by Peter Leeds which is a very good book which I bought from kindle. This book gives a general overview of penny shares including their history and details how to find a lucrative winner. Penny shares are defined as a share with a value of less than $5.00 and they are thought to have originated in Canada. Mining companies would sell ultra low priced shares to raise money for new mining operations. The Vancouver Stock Exchange was almost exclusively penny shares until it merged with the Toronto Stock Exchange. Penny shares can potentially make you very rich very quickly but they also carry a lot of risk. You should only invest in American companies. A popular acid test to study a companies viability is find out if they can pay off all their debts and expenses and still have enough to continue in business. This book also looks at technical analysis & fundamental analysis which can help you pin point a good stock. If you buy loads of penny shares in a company you can potentially make the price of those shares go up without spending all that much which is a little unscrupulous and some people do this and then sell their shares which makes the price crash but makes them a nice profit. Others sell their stock and when the price crashes are able to buy more stock with less money.