Muggles and Penny Stocks -There’s No Magic to Financial Success

Penny stocksMuggles and Penny Stocks
Don’t Wait for Next Big Thing
by John Whitefoot for Peter Leeds Inc.

NEW YORK, NY (rushrpnews) July 27, 2007- Whether you’re interested in sports, automobiles, the stock market or macramé wall hangings, everything took a back seat last week to the publication of Harry Potter and the Deathly Hallows, the last installment of J.K. Rowling’s magnum opus.

Even before the book was published at 12:01am on Saturday July 21 though, the worldwide literary community (and revenue hungry publishing houses) was on the lookout for “the next Harry Potter”. Who would take up the torch and set the book club world on fire?

While there are a number of literary hopefuls out there more than willing to be given the moniker “the next J.K. Rowling”…the truth is, there never will be another J.K. Rowling. We’re still on the look out for the next Ernest Hemingway and Flannery O’Connor. Sure, other cultural phenomenons will present themselves, but no one will ever storm the same path that Rowling did.

But that won’t keep us from looking. Why? Because we want there to be more. We want to know that something special could be lurking just around the corner. And that we will find it. That kind of promise certainly hasn’t hurt Las Vegas or Atlantic City.

If there’s one gaggle of people always on the look out for the “next big thing”…its investors. Deep down, we know that out there somewhere, on some stock exchange is a stock that is ready to explode.

Spend some time checking out financial websites (or your inbox) and you’ll invariably come across some investing sooth sayer telling you their next stock pick is, “Closer to being a SURE THING than anything I’ve come across in a very long time.”

Or, more encouraging, I discovered recently that “Phil” found a stock that he calls, “the next Berkshire Hathaway.”

Maybe…

As a penny stock investor, I’m not really on the lookout for the next Wal-Mart, Berkshire Hathaway or Google. Why? There are lots of reasons. First, it’s important to know that penny stock investors do not follow the same trading patterns as their mid-to-large-cap peers. ‘Buying and holding’ is not something penny stock investors do very well; by design.

Penny stock investors may be seen as being riskier than other investors, but we all like to limit the potential downside. Understand what you’re investing in and you’ll get great performance out of your penny stock portfolio.

And when it comes to performance, I’m quite happy to know that my due diligence has helped me realize a short-term gain of 20% to 200%. I don’t want to wait 20 years to see if my initial $2000 investment has turned into $20 million.

Yes, it’s fun to postulate where the next Berkshire Hathaway could come from. However, obsessing over the next “big thing” when there are a number of great penny stocks out there…seems like a waste of precious time (and money) to me.

Is there life after Harry Potter? Yes…but the Harry Potter phenomenon, which has grown into an industry valued at more than $17 billion globally, may never be repeated. And that’s O.K; there are a still lot of great books out there without the buzz.

Likewise, there may never be another Berkshire Hathaway. But you don’t need a stock like that to make your penny stock portfolio a winner.

Wait for the next big thing and you’ll be letting a lot of great opportunities slip by. And really, you’ll only know about the next great thing in hindsight…and you can never profit from hindsight.

To request an interview with Peter Leeds, contact his publicist Anne Howard at 310-295-9578, or writer her at anne@annehowardpublicist.com

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