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Saturday, November 18, 2006

The Penny Stock Investing Company

When it comes to penny stock investing, learning about the company will provide you with the most ideal methods to making the right decision regarding the company itself. If you can take some time to do your homework, in other words, you are likely to find benefits along the way in the penny stock.

That is, learning more about the company that you are potentially investing in just makes good sense, right? Would you pour in thousands of dollars to just anyone that came up to you on the street and requested money for their new business? Not likely. For that same reason, you should know as much as you can about the company you are potentially purchasing stock to support.

Here’s the bottom line. This company has not been traded, most likely, on the stock market. Therefore, it is not well known. On top of that, as you will learn later, there are plenty of opportunities for people to take advantage of those that are looking to invest in penny stocks.

With that said, the bottom line is that if you want to invest in penny stocks, you need to spend some time doing your own research to develop your own plan to make money with them.

One of the largest problems with penny stock investing is the fact that you are dealing with a relatively unknown company. But, that does not mean that you should not deal with them because no one knows about them. What happens if you pass them by and they become the next Microsoft some how in the future?

The good news is that there are a few easy and effective ways to learn more about a company by just doing a bit of investigating into them.

Here are some key things that you need to do before investing in any penny stock company.

Pick up the phone and call the company. This is a great easy way to learn about the company in the most ideal way possible. That is first person. Here’s what you will want to do.

· Get the company’s name, phone number and/or their address from the broker that is selling them. No need to provide any other information or tell them what you are up to.

· Call the company at the number given.

· If you can not get a hold of anyone, find out if there are alternate phone numbers available about the company itself. You can even search for the company name online to learn if it is in fact there and viable.

· If you can not find anything out about the company then you may want to take into consideration a different penny stock. Wouldn’t any good company want to be contacted in order to actually do more business?

Now, calling the company is good, but what should you say if in fact you do get in touch with them? It is simple, you can simply say that you have heard about the company and would like to know a little about them. What do they do, where they are located as well as what their client base is like? Any decent company will be more than willing to provide this information to you, right?

But, what happens now? Do you want to simply stop there? Is that enough information for you about the company? Not yet it is not. You also want to know if the company is real and not just someone on the other line to answer just in case an investor calls.

To do this, take into account how the phone is answered. Did they answer with a simple, “Hello” as if it was a home? You can find out if a phone number is a residential line as well. If you are in fact connected with someone’s home, most of the time this is a scam and you should not want to invest in it. Definitely consider looking elsewhere for a penny stock to invest in.

You can also track down the company in terms of how good it is in other ways. For example, if you are investing in a company that sells coffee, why not consider pretending you are the customer here.

· Where can you find the coffee?

· What type of reputation does the company have with such things as the Better Business Bureau?

· Does the company have a good health department report?

· Are there other factors that play a role in how well this business can do?

In other words if you are the customer looking to purchase a product of any type from this company, what would you get from them? Why ask this question? It is simple. If they do not have good customer relations, how well will your stock actually go up? Again, we ask, “would you give your money to just anyone on the street that asked for it?”

So, what is the bottom line here? It’s quite simple. If you can not verify that the penny stock company is really a company, avoid them at all costs. All businesses that are real and true companies are more than willing to talk to customers as well as investors.

Of course, if you do get a hold of them, you do want to take some time to insure you are talking with someone that is actually capable of providing information such as the manager or owner of the business.