The Stocks you pay for
The other day I wrote an article discussing my distaste for penny stocks and for how they are marketed as “the next big thing”, ruining thousands of people’s financial lives. Well, if you can’t invest in penny stocks, what can you invest in? How about we invest in stocks that, at an extremely basic level, are actually worth something?
Here is a list of companies that I would deem “investable stocks” Each of these companies is based on a simplistic screen that simply looks for a company that has a moderately high share price, growing net income, growing sales, a moderately high Piotroski score, and a moderately low P/E.
How do these “investable” stocks do over the past 16 years?
As you can see, we just built a screener that has historically outperformed the market at a slightly higher standard deviation. When compared to the returns offered by penny stocks, it’s easy to see why one would gravitate towards the investable subset rather than the highly volatile penny stocks.
There may not be the 500%/day moves in these stocks, but the probability of finding that trade with penny stocks is so low that it isn’t worth the bother. At that point you’re just going to Vegas every time you log into your brokerage account. When you think of the stock market, you should think investing, and think about your future, not about making a quick buck finding the next “unicorn”.