If you’ve spent some quality time watching BNN like I have you will often notice that the advisors that they often have on their programs will disclose whether or not they own the investments that they’re talking about. This is an important thing to consider and is even more important when you look at penny stocks.

source: wheat_in_your_hair

Conflicting Interests
When you listen to any analyst you have to keep in mind that they have their best interest in mind. If they are long a stock and get in front of a few hundred thousand people and tell them all it’s great and everyone should go out and buy stock for themselves and their grandmothers then there could be enough groundswell to move the stock higher. Therefore they have just actively participated in moving a stock higher because of their own self-interest. This is a red-flag.

Disclosure in Penny Stocks
Disclosure becomes more important in penny stocks because of the nature of the price and the volumes traded. Some small cap stocks trade in very small volumes and therefore can have a big difference in the bid/ask spread. So if someone talks about how great a particular penny stock is, then they may have the opportunity to influence the price much easier than a multi-billion dollar market cap stock.
Penny stock newsletters will have a disclosure statement on the bottom of their emails that will outright say that they are getting paid to profile these companies and suggest to the reader that the price is moving higher.

What Makes the Canadian Penny Stocks Blog Different?
The Canadian Penny Stocks blog doesn’t accept payment from any company to feature them on the website. All of the companies appear as a result of interest in the company as a result of fundamental or technical analysis. The blog will always try to disclose ownership positions in shares but it does become tricky in a blog format, since some stocks will be traded in and out of positions and the post remains on the blog.
There is a disclaimer on this blog that indicates that the information provided is not meant to be advice, nor a recommendation to buy or sell a stock. You should always be diligent with your sources of information. I hope that you can find the blog as a useful source of information to begin or further your research in to stocks and investing.

This blog will from time to time post information on products that have been personally vouched for and the site may be paid for the referral to those products. For example I could not have been able to perform a review of the Questrade platform without being a member myself. I continue to be a happy member, however may be compensated in a small way if you sign-up and become another happy member like me.

It’s unfortunate that penny stocks can get a bad rap, because if you have the stomach for high risk investing, there is some great money to be made discovering great small companies with great ideas and potential. The Canadian Penny Stocks blog will continue to strive to avoid the hype of penny stock promotion and provide some ideas and disclosure.

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