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Gotta Keep Dancing – Trading Of Penny Stocks Soars To Record

Tyler Durden's picture




 

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

It seems that no market tops until the bag has been fully passed to retail muppets, and we appear to be in the process of that happening right now. I have detailed this with regard to credit markets on several occasions, most recently with how Blackstone and other private equity firms are stuffing public pensions with their products using secretive and highly unfavorable terms. In case you missed it, I suggest reading my post: Leaked Documents Show How Blackstone Fleeces Taxpayers via Public Pension Funds.

Moving along to today’s story, we find that the retail investor is getting back into the stock market and is seemingly focused on the riskiest types of shares; unlisted penny stocks. They aren’t just dipping their toes in either, the pace exceeds that of the tech boom of the late 1990′s and has just hit the highest amount on record.

 

We learn from the Wall Street Journal that:

Investors are piling into the shares of small, risky companies at the fastest clip on record, in search of investments that promise a chance of outsize returns.

 

The investors are buying up so-called penny stocks—shares of mostly tiny companies that aren’t listed on major U.S. exchanges—at a pace that far eclipses the tech boom of the late 1990s. Those include firms that focus on areas from medical marijuana and biotechnology to fuel-cell development and precious-metals mining—industries that are perceived by some investors as carrying strong growth potential.

 

Average monthly trading volume at OTC Markets Group Inc., which handles trading in shares that aren’t listed on the New York Stock Exchange or Nasdaq Stock Market, has risen 40% this year in dollar terms from a year ago, to a record $23.5 billion.

 

The renewed interest in a market that used to be known as the pink sheets—because of the colored pieces of paper once used to record prices for unlisted stocks—shows investors are ramping up risk in a bid to boost returns as U.S. stock indexes are hovering near highs and stock valuations have risen above historical norms.

 

Traffic on penny-stock trader forum InvestorsHub doubled between Christmas and last month, said Clem Chambers, chief executive of U.K.-based financial website ADVFN.com, which operates the forum. He said people who have been registered members for years, in some cases a decade or more, account for three-quarters of the increase.

 

The rebound also comes as individual investors are showing signs of increased interest in stock trading in general. Discount brokers TD Ameritrade Holding Corp. and E*Trade Financial Corp. last month reported jumps in daily trading volume in the first quarter from the same period a year ago.

Keep dancing serfs.

Full article here.

 

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Fri, 05/23/2014 - 18:08 | 4789911 HedgeAccordingly
HedgeAccordingly's picture

Frothy market. http://hedge.ly/1lX6bOh .... The little guys need $$$ too?

Fri, 05/23/2014 - 18:45 | 4789963 Keyser
Keyser's picture

The pump-and-dump artists are duping the sheeple again and it looks like their are cleaning up...

 

Fri, 05/23/2014 - 19:46 | 4790094 bunzbunzbunz
bunzbunzbunz's picture

But, but once I doubled my money on a penny stock. The next two went to zero, but I think fourth time is the charm.

Fri, 05/23/2014 - 19:43 | 4790085 midtowng
midtowng's picture

Penny stocks, profitless-IPOs, and margin debt all way up there.

No, that doesn't sound like a top at all.

Fri, 05/23/2014 - 18:14 | 4789922 LetThemEatRand
LetThemEatRand's picture

Penny stocks.  Like BofA and JPM should be but for the Fed backstop?

Sat, 05/24/2014 - 07:10 | 4790960 what's that smell
what's that smell's picture

dude! i can borrow short-term money at 125% with no money down...

where else am i gonna put it to work creating jobs and making the world safe for democracy?

you're either with us pumpdumpers or you're with the bad people.

Fri, 05/23/2014 - 18:14 | 4789923 BeetleBailey
BeetleBailey's picture

Insanity....same shit happened during the tech shit show...same result will happen this time as well; stups getting mowed down like grass...

serves them right....idiots

REMEMBERING WHY WE "CELEBRATE" MEMORIAL DAY.....

Private Bailey /

Fri, 05/23/2014 - 18:20 | 4789933 FieldingMellish
FieldingMellish's picture

TSX-Venture (world's largest market for PM and oil juniors and microcaps) has near record low volumes and the index is down 60% from 2011. Clearly there are penny stocks and penny stocks.

Fri, 05/23/2014 - 18:20 | 4789934 semperfi
semperfi's picture

my wife just told me to go buy some stawks - my best indicator of a top

Fri, 05/23/2014 - 19:30 | 4790060 what's that smell
what's that smell's picture

a penny times two is a two penny.

CAPITALISM....IS....THE....GREATEST....IDEA....IN....THE....HISTORY....OF....THE....UNIVERSE.

two penny times two is four penny....fuck, this shit is easy.

if you got a penny i'll give you two fer it....oh crap, hold on a second..........................

Fri, 05/23/2014 - 19:47 | 4790095 bunzbunzbunz
bunzbunzbunz's picture

You drank too much.

Fri, 05/23/2014 - 18:23 | 4789939 disabledvet
disabledvet's picture

As Joe "Big Stock Trader at the PO" asked me once "what's a reverse stock split?" To which I say now say "just ask friggin Citigroup!"

There are two types of people in this world folks....those who can still afford to pay their dividend...and those who are heading straight to the Pink Sheets (cough, cough General Motors, cough, cough.)

Fri, 05/23/2014 - 18:25 | 4789941 LetThemEatRand
LetThemEatRand's picture

Heading straight to the Pink Sheets with no power steering, brakes or air bags.

Fri, 05/23/2014 - 18:52 | 4789984 disabledvet
disabledvet's picture

"Nickel plated" bitchez.

Yeah, you gotta pay for that.
Thomas Jefferson never made it on the scrip...be he's still on something that is illegal to meltdown.

How's that for truth.
"200 years plus and he's still showing people the way."

Fri, 05/23/2014 - 19:40 | 4790080 BearOfNH
BearOfNH's picture

TJ is on the $2 bill.

 

Fri, 05/23/2014 - 19:49 | 4790098 bunzbunzbunz
bunzbunzbunz's picture

:)

Fri, 05/23/2014 - 18:45 | 4789969 hairball48
hairball48's picture

Wouldn't be more accurate to say that it's the retail investor's fund manger (or whatever name you choose to call him/her) investing in "penny stocks" on the retail sheeple investor's behalf?

The average sheep doesn't know much about pennyt stocks and is unlikely to invest directly himself.

Or am I wrong?

Fri, 05/23/2014 - 18:56 | 4789993 disabledvet
disabledvet's picture

Every retail investor I knew ONLY knew penny stocks.

"Buy Apple at four hundred? HELL NO!"

Don't even get me started on Bershire Hathaway.

Case study: FannieMae and FreddieMac.
Ironically that's owned by the taxpayer.

Fri, 05/23/2014 - 19:19 | 4790041 Miffed Microbio...
Miffed Microbiologist's picture

Hairball, Mr and I did invest in several penny stocks long ago. I think we made a few hundred when we finally cashed out and considered us quite lucky to have received that. We approached it as one approaches going to the horse races, realizing there is so much more involved than odds and workout stats.

The idea any respectable financial advisor would promote them as a part of a portfolio seems crazy to me. The volatility alone is certainly gut wrenching. I am so glad we have now focused on PMs, sustainability and simple living and left the speculating world chasing the mythical 10X. I have far less stress headaches and sleep much better now.

Miffed;-)

Fri, 05/23/2014 - 18:47 | 4789974 kchrisc
kchrisc's picture

In my best Yoda voice: "Desperate they be now."

Fri, 05/23/2014 - 18:58 | 4789999 q99x2
q99x2's picture

Bankrupt MtGox Co., Ltd. Bankruptcy trustee Attorney-at-law Nobuaki Kobayashi

I had $1.03 in my Gox account and received my tuff luck email from the Gox's alcoholic tech dude today.

At 5:00 p.m. on April 24, 2014, the Tokyo District Court granted the order for the commencement of the bankruptcy proceedings vis-à-vis MtGox Co., Ltd. (“MtGox”), and based upon such order, I was appointed as the bankruptcy trustee (Tokyo District Court 2014 (fu) no. 3830).
The bankruptcy trustee will implement the bankruptcy proceedings, including the administration and realization of the assets and investigation of the claims.

Fri, 05/23/2014 - 19:28 | 4790057 Quus Ant
Quus Ant's picture

iS It tOo LatE to gET In???

Fri, 05/23/2014 - 19:45 | 4790090 The Merovingian
The Merovingian's picture

An anagram of that is 'It is not elite goat to'.  So, I say hell no it's not too late, go deep or go home!

Fri, 05/23/2014 - 19:51 | 4790102 bunzbunzbunz
bunzbunzbunz's picture

Flawless logic cannot not be denied. Use margin, get cash advances on the credit cards, and by all means refinance the house. 5/5 ARMS are at historically low rates :)

Fri, 05/23/2014 - 20:08 | 4790127 pops
pops's picture

Security guard where I work advised me to "get in while I can" to AXCG and CMGO because they're "going to the moon." 

If he doesn't know, who does? 

Fri, 05/23/2014 - 20:25 | 4790164 Dr Benway
Dr Benway's picture

Statistically, his chances of picking a winner are as good as those of a chimp or a fund manager.

Sat, 05/24/2014 - 09:48 | 4791067 esum
esum's picture

what e-cig is compatible with hash oil.... that's the penny stock i want... the wave of the ussa future.... when will the sinaloa cartel elect another president / ag combo in ussa... plato o plomo ?

Sat, 05/24/2014 - 10:01 | 4791081 neidermeyer
neidermeyer's picture

I agree somewhat with the hash oil e-cig ,, first to market will win although they will be copied.. I'm waiting for gold juniors to crash and burn before buying in..

Sat, 05/24/2014 - 12:13 | 4791283 pickupthatcan
pickupthatcan's picture

I remember the good ol' days of working for F.D. Roberts in the '80s.  50% spreads, split it with the house.  Sometimes corporate would put out fake press releases pumping up XYZ stock and offer us 75% of the take.  Folks didn't realize that the stock had to go up 100% to be at the money.

Some of the brokers were making five figures a week.  That is until the SEC and federal mashalls took them away in handcuffs.

Thieves and crooks.  All of us were.

 

 

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