Heres the objective: turn a hundred thousand dollars into a million in the stock market. Ill make a couple of unlikely set-ups here, such as the hundred thousand is sitting in a Roth IRA account that eliminates tax issues. This hundred thousand may only reflect one part of the overall retirement monies for example, perhaps the other money is invested in an investment grade insurance contract. That way, the person is going to have a guaranteed income for retirement even without the hundred thousand in the Roth IRA.
Im generally not agreeable to cheap stocks, much less penny stocks as meaningful investments but here we go anyway:
Bought 22,000 shares of RBS at $4.35 (Fridays closing price)
Risk: 20 cents per share, for stop out around $4.15; total risk is approximately $4400. The Royal Bank of
And now here is the lottery ticket, 100,000 shares of IFLI at 1.5 cents. Thats right, a penny and a half, for an investment of $1,500. We may never see this money again, yet, if all this talk of the rise of MMA as the next big sport takes off and the IFL benefits, and if luck may have it that the share price goes up ten points weve got seven figures just on this position (and therefore our million dollar objective). I would not dare say that buying IFL is like buying the equivalent of an NFL in its infancy. You may recall the XFL, a professional football league in 2001 that only lasted one season. The XFL was intended to be a major professional sports league to complement the off-season of the NFL, but didnt quickly pick up a large audience and ended after one season. The IFL lacks the same kind of organization that makes the NFL, NBA, MLB, World Wrestling Federation, etc. operate as a powerful force. The more organized you are, the greater your edge, be it, in a personal sense or a corporate one. I would never spend a dollar on a lotto ticket, but a penny and a half or two cents on a dream well, for some this is going be like taking those annual lotto dollars and putting it to work someplace else.
*Update: RBS went up approximately fifty cents, then down, so at best it brought a small immediate profit, broke even or triggered a small loss depending on timing/exit ability. This bank was caught up in bailout activity and due to reverse stock splits the stock trades approximately from $9 to $19. The best we could have hoped for was this kind of run without a reverse-split. This part of the experiment failed.
*Update: IFLI never made any progress, it held on for a fraction of a cent and in 2010 it sought a reverse stock split of perhaps 200 shares to become one new share. Yikes! This long-shot failed.