Chapter 3: Your Broker Set Up - The Problem
The problem with this type of broker is quite obvious. You will not know first hand where the stockbrokers loyalty lies. Therefore, will he sell you a stock that is not doing well? Does he know a stock you own will be doing better in the future and therefore wants to sell it to you? Of course we can not say for sure that a stockbroker will do this or even that he will not. The bottom line is, though, if you are in the business of penny stock investing, you need to know whos behind you.
Many penny stocks are traded in the way of principal stock brokers. Although this does not necessarily have to be a bad thing, it is important to know that it could potentially be there. There may be a conflict of interest in the way of the stock broker and you should know about it before hand.
If you purchase those penny stocks for this brand new company at just pennies and hold them throughout the bad years until the company gets established enough, you may be able to sell them for top dollar really making a good deal of money off of these penny stocks.
Micro Cap Sector
Even though you will do your best to insure that this does not happen, you still need to insure that you can do okay if it should happen to you.
To take full advantage of what this e-book offers, we suggest taking the time to really read through the entire thing and then read it again. There is no hiding it that penny stocks are prime candidates for the bad broker guy. The company could do exceedingly well right off the bat. Throughout this e-book we have talked about all of the bad guys out there. They are volatile and can be something of a huge risk in most situations. There are various prices that they are bought and sold with.
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