So I started looking into Rudy Nutrition (RUNU). Boy what a crappy company this is…but what insane price action. This is pennystocking at its best. Talk about shenanigans. Here’s a stock that went from a few dollars to $26k in 2004. Then earlier this month, it spiked from $2 to 60 and then back down to $2 in two days.
I don’t know what that really says other than either major manipulation of the price or a few lucky SOBs buying and selling at the right time. It’s almost impossible to time these things and making any fortune on a stock like this is pure luck.
That being said, you want to look for liquidity and volatility when playing these penny stocks. Forget about financials because on the pink sheets and OTC it doesn’t matter.
Here’s another penny stock I made money on last year from nothing but fluff and hype. Global One Investment Holdings (GOIH). Though at the time they were called Silver Screen Studios. Their operation consisted of one digital video camera, a G5 Macintosh and a warehouse with a green screen. Yep, that’s all they listed as assets and yet the stock went from a nickel to a couple bucks on PR and fluff and now it’s sub penny. I got stuck holding the bag on 50k shares because my broker stopped accepting electronic transactions for this stock…that reminds me I need to move that account to a new broker.
Anyway, if you want to learn more about penny stocks and playing outside Wall Street, check out Timothy Sykes at http://timothysykes.com and read his book An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund.
