Federal National Mortgage (FNME) trades at $0.33. FNME is down about 99.5%. Ford was down about 95%. Both stocks were recommended by major brokerage firms at their highs. We do not know how many complaints were received by the SEC on these issues, and other similar stocks. We are aware of complaints in the penny stock market for shares that have dropped in price. Times have changed. Should the Penny Stock Market or traders trading in this market be disrespected?
Why does the Penny Stock market exist? During the 1900s, Wall Street Investment Banks and powerful brokerage firms ruled the roost. They invented, controlled the rules and created the game. It all changed about 10 years ago. The Legislative arm of Wall Street finally unseated the Wall Street powerbrokers. They installed regulations that essentially strangled and severely limited the capital raising function of smaller companies in the United States. IPOs, secondaries and selling groups became a thing of the past in the micro cap/small cap markets. The rise of the Penny Stock market today is really a mechanism of liquidity, individual and corporate need. Companies and large third party shareholders now have a place to raise capital and create liquidity that the Legislative arm effectively eliminated.
We at Cohen Research and Grass Roots Research and Distribution, Inc. have identified thousands of investor awareness websites and firms today. Some are strong; others are not. Those active promoters serve the function of creating liquidity that was once available to micro cap and small cap stocks. Without this market, many of these companies would suffer. The 2009 Recession and now in 2012 has created even more need for liquidity. Today's Quarterback Groups are yesterday's selling groups and secondaries.
The Penny Stock Market today is active, alive, and serves its purpose. It is real and needed. There are excesses. There is an enormous opportunity to make high risk money. Over the years, there have been abuses in the Penny Stock market, but perhaps no more so than for mid cap, large cap stocks, and other trading markets. Just ask the naked short sellers in Canada in 2003.
Today's Penny Stock market provides large potential trading gains unavailable in any other market we know of today. It is not uncommon for a penny stock to go up 100% to 500% or more in a few days. Why should anyone with trading instincts not take advantage of making money, especially in difficult times? Shrewd traders trade this market. Sophisticated traders are not ignorant. Many of these traders sift through mountains of information, some sophisticated information; much of it is hokey. The opportunities during this Recession to make a lot of money are there for the bold; not the faint of heart.
Should you short term trade in the Penny Stock market? Statistics say yes, indicating that this is a short term traders market; not a long term investor's market. Please note: As of April 26, 2012, more than 90% of our 133 initiate coverage research reports share prices rose 90%+. Volume increased in excess of 80% of our research reports and email blast campaigns. All of our email campaigns increased their prices 90%+. More than 80% of our report prices reach their high price within 30 days. Approximately 17% of all stocks went up more than 100%. We believe this price appreciation reflects dollars spent in a campaign, short term trading activity. Our research and distribution credibility helps, but performance is more determined by campaign budgets. Some stocks rise more than 500%, contributing to the large percentages we experience in our business. We focus on long term investment and expanding the shareholder's database of any client company. Reality is, however, that the penny stock market is a short term trader's market. Sharp traders take their profits in short periods of time. The trading risks, however, are considerable.
Should you invest long term in the penny stock market? Statistics say no and indicate this is not a long term investor's market. What goes up normally must go down. Unless you believe a company will be adequately financed long term for about 5 years, it is highly risky to invest for the long term, especially in a recession. When investor awareness campaigns terminate, the majority of share prices historically go down; primarily from profit taking and lack of dollars being spent in a given campaign. Since 2002, we understand there have been thousands of campaigns. It is highly risky to invest long term in any company in the Penny Stock market.
Cohen Research and Grass Roots Research's outside analysts have brought to this market a new level of sophistication, true in depth fundamental securities analysis, experience, and brain power coupled with a high level of doing business. We feel this level of quality is lacking as a part of the investment awareness paradigm. Our purpose is to respect the investor, respect the industry, create quality, and not inundate investors with hype and promotion. We believe we have the brain power to help uplift this industry.
Our reports are commercial advertisements. They include securities analysis at the highest intellectual capital level in Wall Street; levels above the promotions, hyped creatives, watered down so called 'research' in the investment awareness industry. We have introduced the Gold Standard of micro/small cap research into this industry: the Cohen and Grass Roots brand names. We believe this standard of excellence does not exist in this industry.
Welcome FNME to the Penny Stock market.