What are the (3) best stock picks for the next 3 months that are under $5 ?

Answer 1

I would advise you not to pick stocks. There is a substantial body of academic knowledge and 80 years of research data showing that individual investors competing with one another in a liquid market can not consistently beat the index. Bogle's Vanguard Index fund beats 80% of all actively managed funds over a twenty-year period, primarily because of its low cost, but also because individuals traders consistently mistime the market.

Therefore, you, as a rational investor, should invest in an index fund, specifically a small-cap value fund, as Fama & French's three factor model shows that these stocks have historically outperformed their peers by almost three percentage points. (12.9% vs 10.3%.)

If you you invest in an index, you can expect both appreciation and volatility. Your appreciation will be approximately 10% a year, or 2.5% for three months, and your volatility will be 16%, or 8% for three months. (Volatility calculations work differently.) Therefore you can expect to make between -5.5% and +10.5% within three months on your original investment with 68% confidence or between -13.5% and +18.5% with 95% confidence.

You can increase your appreciation and reduce your volatility by selecting a longer holding period for your investment. For example if you held your investment five years, you would expect to make +84%, with a volatility of 35%. Put another way, you have almost a 50% chance of doubling your money.

You can also achieve greater average returns through the use of leverage. Margin loans are one way, but the cheapest and safest way to get leverage is to use options, either long calls or bull call spreads. If used correctly, options give you tremendous capital efficiency - in other words you achieve the same long-term investment results but use less capital. If used incorrectly, you can wipe out your entire portfolio in a bad day, so you have to know what you're doing.

Index funds, options, and small caps are not heavily marketed because nobody really benefits by educating you as an investor. Wall Street would rather you blow through your money picking stocks and paying high commission fees, and then give up and turn your money over to active management and pay high management fees. You will only learn about index funds in books and articles, in finance courses, or by going to the original academic research.

There are also a lot of scams out there involving options where people promise that you can get rich if you take their two-day three thousand dollar course. Options are not that complicated, and you can model any investment strategy you can think of with excel in an afternoon. And like I said before, all options do is let you trade stocks or indexes with less capital and achieve the same results (minus some fees associated with using other people's money), so there's no magic there.

And if anyone you know claims that they have a system for consistently beating the market, then ask them to publish it with 80 years of U Chicago securities data, and then go to Oslo to pick up the Nobel prize in Economics, and then to Wall Street to pick up a $25M a year job advising financial institutions.

Answer 2

That is a very open ended question it's hard to answer. With over 20,000 stocks in the available market to trade, just knowing the stocks under $5 can be tough. And actually in todays market, you may want to start even lower. My suggestion is to use an online scanner tool from a favorite website. My fav is http://www.consensustraders.com as it gives technical analysis on all stocks on a bunch of indicators. For picking which stocks are actually under $5, maybe check out http://www.candlestickchart.com . you may not want to use candlesticks right away, but they are the basis for many traders even though they don't admit it. Also, they have a free trial so you can use and abuse their Query tool which will allow you to choose the price range you want to look at as a starting point. THEN make sure to read the NEWS on each stock. this is why I start with the candlestick site and then go to consensustraders to see what all the technicals overall say, THEN I check the news... fun eh?

Answer 3

Calpine (Pink Sheets, CPNLQ)

The company is in bankruptcy reorganization and will shortly be emerging from bankruptcy. The stock price has moved up from about $0.40 before November 2006 to $1.85 March 23, 2007. It's 52 week high was $2.12. I expect the stock to soon go up above $20.00 per share based on the research I've done. I've held a significant position in the stock since November 2005, which has gone up about 500%.

Answer 4

I've made a nice profit on a couple of suggestions he's given and plan to start trading his ideas a lot more. I definitely recommend subscribing to https://tr.im/pennystocks
Very good research, quality stocks. I was a bit weary of penny stocks from all the bad hype they receive but this guy is pretty legit. He's put my mind at ease with a lot of the fears I've had.

Answer 5

CPVD MP3 patent Holder READ Lawsuits flying around

Acording to Apple's iPod MP3 players account for %30 of apple/s
totla revenues,and apple MP3 players account about 75% of Mp3-player
sales in the United States.This could be Huge im goiving the company
a phone call to see whats going on This could be a PTSC....

And it has only Outstanding Shares: 160,006,250 MP3 portfolio
opportunity THIS COULD DO A HUGE RUN ???

These patents can be regarded as `signposts' leading to the MPEG-2
and MP 3 data compression standards. Here a few details on some CPVD
patents:

US Patent 4682248: Audio and Video Digital Recording and Playback
System
US Patent 4755889: Audio and Video Digital Recording and Playback
System
European Patent EPO 237561: Audio and Video Digital Recording and
Playback System
European Patent EPO 140957: Audio Digital Recording and Playback
System
US Patent 4636876: Audio Digital Recording and Playback System
US Patent 4472747: Audio Digital Recording and Playback System
Canadian Patent 1237520: Audio and Video Digital Recording and
Playback System
Canadian Patent 518409: Audio Digital Recording and Playback System
Japan Patent 2053230: Audio and Video Digital Recording and Playback
System
Japan Patent 2596420: Audio and Video Digital Recording and Playback
System

Answer 6

I really couldn't tell you..BUT there is a site mentioned frequently in " answers" that is a " fantasy portfolio" site...I've checked it out any many of the stocks traded there could be just what you're looking for...
Try http://www.top10traders.com
look into the various portfolios, you'll find many very low priced stocks doing well !

Answer 7

I usualy stay below 2 so I haven't done much reaserch on ones between 3 to 5. But my picks are NEOI, AGGX, AGNM AEPW.