The Investing Game

Like many these days, I have dabbled in the investment scene. Of course I've had a company 401K for years and really didn't pay much attention to it. Last year however, things changed! The virus hit, the world got all flitty, and the stock market took a bit of a tumble. 

It looked like a good opportunity to "Buy the dip" as I've learned it's called. I didn't want to say anything to the wife about this as I was afraid it might alarm her. Turned out she was thinking the same thing and actually brought it up to me one day. Ended up pulling some cash from the 401 and opening a TD account. It is now 11 months later and we're up roughly 200%. 

Now considering where the market was a year ago I'm inclined to attribute a portion of this success to "Shooting fish in a barrel". I'll take some credit for myself however. I've learned quite a lot along the way, and come to have a grasp on just how much I don't know too. For example, I knew there were different markets. Nasdaq, NYSE, Amex are the big established boards. Other stocks trade on "Over the Counter" or OTC exchanges and it turns out there are a few of those. Conventional wisdom holds that OTC tickers are basically "trash" stocks to be shunned by serious investors. 

Now, I'm a serious investor. I mean, we're only talking about being able to retire and live in something called "relative comfort". Perhaps even enjoy the fruits of our labor for a few years while waiting for the inevitable closing credits. So yeah, I take investing seriously. That's why I have a 401K that fairly trumpets, "Serious!".

That's not what this is about, I have serious locked up. This is about having some fun. The wife enjoys an occasional trip to the local casino to play slots and hey sometimes we get a free room out of it. I'll stick twenty bucks in a penny poker machine just to see how long I can sit there before it's gone. Twenty bucks at five cents a hand can last quite a while, sometimes when I play the Double Joker machine I even end up with an extra seven fifty at the end of the evening. She wins too sometimes, but not something I get very excited about. 

This is different, I get to play for larger stakes with substantially better odds of winning and the decision making has a greater impact on the outcome. There is a term used in this area, "Penny Stocks". This actually refers to anything trading at less than five dollars a share. Many trade on the major boards, many more on the OTC market. 

When I picked a trading service to use, I didn't really have a grasp on the nuance of the situation. I think I chose TD because it was easy to spell. Turns out that their "free" trades applies to major board tickers, OTC have a service charge. That isn't a deal breaker if I want to buy one or two, or if I'm buying a large enough dollar amount but it discourages active trading on those stocks. Which is probably the point. Turns out other services do not charge extra for OTC and it is here our game begins.

I created a third account, by this I mean as of yesterday. I funded it with $5K and bought more or less even value shares of twenty OTC Penny stocks. Almost all of these tickers trade for less than a dollar a share, a few less than a penny! They are not selected randomly. I have a rudimentary screening process, these twenty were culled from an original list of about one hundred and forty companies. I have reasons for liking each of my twenty selections. The next fifty two weeks will attempt to validate my process and have some fun watching it develop.

My intent is to leave the 20 selections right where they are for the next year and declare a winner! I'm going to drop $250 into each slot, give the wheel a spin and, ZZZZZZZzzzzzz tic-tic-tic... ticccccc! See who comes out on top. Updates will be weekly to follow our contestants along their journey!

This is Week Zero - The contestants are:

Symbol Quantity Cost Basis Per Share Current Value
CYIO 445 $0.56 $309.27
DFLYF 85 $2.96 $249.90
FORW 265 $0.95 $245.12
FUAPF 1,645 $0.15 $279.48
GPL 225 $1.05 $229.50
GRNH 7,800 $0.03 $280.80
HITIF 405 $0.61 $249.03
IQST 315 $0.79 $248.81
MGON 2,780 $0.09 $222.40
MMEDF 60 $3.97 $240.00
OZSC 860 $0.29 $285.33
REFG 4,165 $0.06 $234.07
SFOR 1,470 $0.20 $352.80
SHMP 320 $0.79 $241.60
SING 5,000 $0.05 $250.00
SLGWF 545 $0.46 $261.60
SMME 5,555 $0.05 $244.42
TSNP 185 $1.35 $240.50
WHEN 55,555 $0.00 $244.44
XPL 280 $0.89 $263.62








good luck, I hope you come out with a jackpot win. 


Oh, I've looked again. You already have a jackpot win. Ah, stick of twist? 


Jackpot wins pretty much sum up the allure of penny trades. In day one I show a gain of about $179. The big gainer on the day CYIO, up about 25%. Nice work if you can keep it up long term. There are roughly 250 trading days in the year. If my $179 gain was to hold up as an overall average, I will be up about $44K at the end of the year. This of course seems like a fantasy! It may be... Or maybe not! Stay tuned for weekly updates.

good luck.