JDH - still holding some interest

[ABuzz]

It would appear that yesterday's 8 million share trade was one buyer, cos everything went through at 10.54 - 10.55. someone must be pretty confident to fork out R 80k on this one?

[SimonPB]

surely you jest? The chance to exit with at least some cash (selling at 1c) is a whisker away from being gone and the sellers at 2c are stacked way way deep.

[ABuzz]

Yes, there are plenty stacked at 2 cents, but one can't ignore that this share has had its most active 2 months in its history on the JSE. Something has got to be happening. I'm sitting this one out to see.

[Liam]

Simon's negative reply (exit with 1c) refers: Great Simon, you hold tight! And while talking about exiting with ?c, I jumped out out AWT at three cents, hoping to 'exit with something'. Two weeks later they went through the roof. So hey, I exited cleanly. Too bad about the 2000% down the tube. So, in jdh's case, I'm along for the ride, where-ever it leads.

[SimonPB]

Liam, an good for you (noting all buyers have disappeared - so JDH is going backwards again). However my point is that as a trading strategy this is akin to roulette, and at the moment the punter is winning less for their skill more for the fact that the table is warped (in this case a massive bull market lifting almost all ships). Your example of AWT also highlights the risk of when to exit. If this stock starts to move (and I have no crystal ball and as such no idea if it will), then how far? When to exit?

My negativity is because somebody has to present the other side of the story here, otherwise forumites will think this is easy money. In reality these 1/2c shares end up costing the vast majority of people money, and being 1c the risk/cost is +100%. In truth you reward may be potentially great, but reality says that 1c shares are still not worth the risk as they are at 1c for a good reason.

[ABuzz]

And let us not forget those who bought ABO for 2 cents just before it went to 4 cents. There is nice money to be made in penny stocks, yes, it is very risky, but can also be very profitable. I'm not advocating putting all your money into penny stcks, but if you choose wisely and are prepared to sit with them for a while (sometimes a long while) you could be well rewarded.

[SimonPB]

ABuzz, largely we agree on the risks and potential time required, and amount of total investment vs. overall investment. But why does everybody keep on harping back to AWT, ABO and the like? Sure one could have made money, but that has exactly zero to do with JDH, or any other company outside of AWT, ABO etc. I could cite the example of putting money in MKX above 20c, it certainly has the same relevance, which is zero?

[ABuzz]

Simon, I think in essence if one doesn't talk about one's believing in the rises in these penny stocks before they happen the other forumies wont believe their potential or have had the opportunity to speculate in them. It is easy to look back after the fact and say how well a share has performed, but to call it before it happens is what generates the returns and profits. On this forum I called ABO before it went from 2 cents to 4 cents and I called the big interest in JDH a while back when all the 1 cent stocks were depleted and they have remained pretty much depleted since then (about 2 months). And it has had a very much more active run over the last 2 months than it has ever had. Yes, it may amount to nothing and I will be the first to admit that I punted this one and that I was wrong, but for now, I still see it as a good risk worth taking. Time will prove me right or wrong. I think what some of the forumites believe is that you consistently paint a very negative picture of these penny stocks.

[SimonPB]

Without doubt I paint a consistently negative view of penny stocks. It's what I believe and I think many under estimate the real risk.

On another thought, one doesn't have to buy penny stocks (or any other stock) smack right at the bottom. If JDH is going to say 20c, even buying at 5c or 10c would be an excellent return?

[ABuzz]

Simon, even me, "the eternal penny stock optimist", doesn't see JDH going to 20 cents, so buying in at 5 or 10 isn't an option. I'm happy to buy at 1 cent and sell at 3 cents and I am convinced that I won't have to wait more than another year to achieve this.