Betting on the Underdogs: Penny Stocks Picking

There are some logics why you always think big. But there is always power in small things. Remember David was slain by Goliath. In stock market, anyone wanted always to play the big deal, sure fire stocks of blue chip companies. How about trying to invest on the upstart companies who are labeled micro cap companies? Remember hotmail.com of which started small and was bought by Microsoft and Apple Company which started in the garage? These are microcap companies which are now worth multi-billions. Stocks are not simply shares that can be bought and trades. They represent the companies itself. Upstart companies which think their products are good may need not big backing but small capital taken from people who are willing to share their few dollars in order for them to start. Microcap stocks companies in reality are not that small, they are companies that have capitalization of less than $50 million dollars or offer their shares in $5 dollars or less.

It may not mean nowadays so much an amount of $5 dollars but to striving companies who believe on their product the amount is significant. Yeah, there are some speculations, but trading stocks and shares are all speculations. There is no certain things in life (except maybe the end of it and taxes) and there is no sure way of winning. It is good that risk is minimized but at the end of the day taking some risks is the spice of life. There is always that feeling of being excited especially when we are backing the underdogs. The website http://economix.blogs.nytimes.com/2008/08/16/ has-any-penny-stock-become-a-big-company, you will be enlightened that microcap stocks companies are many and some of them are now playing big time. But what is the difference when you trade on the penny companies? The following are some of them:

1. Since these companies, you lack some public information about them. It is simple to look at wall mart, Exxon and other multinationals. There are volumes and volumes of information about them. The bigger the company, the more visible it is. We always see the big guys as expected.
2. Companies that are considered penny stocks companies does not required minimum standards like net assets and number of shareholders as given by major stock market like Nasdaq Stock Market.
3. They are relatively risky. This is because the product and services of these companies are in the developmental stage. Remember when we buy stocks, we are betting on the acceptance of the services and products of the companies in the market. It means the products and services are new. It involved a new endeavor or area of developments of which no other company had dared.

These are only some the differences when trading in penny stock companies. As you can see, these companies have one common denominator, that is, they believe on their own product and services, this is the reason why they offer it to the public. Let us give them a chance and share some small risk with them. The amount may be small but playing bet on them may be of big help to the coming of the new product that is very acceptable to the market. Who knows? You can be a millionaire by choosing the underdog.