My grandfather bought up a massive amount of stocks during the 1929 stock market crash for pennies on the dollar due to a bad economy and scares in the stock market. He may have just had a lot of dumb luck, or, he was extremely wise. Turns out, the stocks that he bought way back then were worth well over a million dollars in the 1980’s-1990’s. His cost was, no doubt, a hundred dollars, if even that.
Today’s stock market scares and economy are almost what they were around the time shortly after the stock market crash of 1929. Stocks that were worth over a dollar a month ago are now worth about 1/4 of what they were. The world economic situation (THANKS TO POLITICIANS THAT CAN’T STOP SPENDING MONEY WE DON’T HAVE) is in very rough shape, even though on the surface, it may not look like it right now. Stock market scares are an every day thing now as well. Not very different from 1929.
Now, I am of the opinion that if a person were wise about their investing, and chose companies that are not very likely to close their doors, but are small enough to allow an investor to purchase “penny stocks”, that the investor could probably be VERY well off in a decade or so. Yeah, i know, I just mentioned “decade”, but truth is, if you can buy up some good penny stocks right now, it isn’t likely that it is going to put you in the poor house, and that small amount of money can just sit there for a decade without causing you harm or grief. In 10 years or 20 years, or how ever long, you may retire, and the stocks that you bought for pennies today, might very well be worth a small fortune when you really need the money.
Let me give you a quick example of a stock that has had it’s ups and downs, and is currently down, but makes for an example. This is a stock that i actually own, and will likely be buying a lot more of. The stock is Easy Link Corporation (ticker symbol ESYL). In 2008, this stock was worth about $50.00/share, and has been recorded at over $200/share.
Right now, ESYL is selling for about 30 cents a share. A month ago, it was about $1.30/share. In the past month, it has lost about $1.00 per share. Sounds like a bad stock, doesn’t it? Well, let’s take a little deeper look at ESYL….
The last news report is from July 11, 2010, where ESYL made final delivery of a $1 million dollar order on a new product that they have created, the NANO-BOX. Over the past month, with absolutely no bad news about the company, their financial situation or anything else negative, the stock lost $1.00 a share. Thus, it isn’t about it being a “bad stock”, it is about the world economic situation and the stock market scares. Once things in the world get back on the upswing (which i fear may actually take 10 or more years), this stock could potentially go back to it’s $50/share value, or maybe even up to the $200/share value it once had.
Now, here is some interesting quick calculations for you: If you bought $300 worth of ESYL stock today, it would yield you about 900 shares. I think you would probably agree that $300 isn’t going to put you in the poor house, so with that in mind, I will say that this is a small investment. Now, we take note that ESYL sat at $50/share and more for a long time, so there is a chance, however slight it may be, that their stock could once again be valued at $50 or more per share. (Please note that I wouldn’t use a number like that unless a company has, in their actual past, demonstrated that they can attain stock values of this or higher magnitudes, which ESYL has done.) Ok, so we look 10, maybe 20 years down the road, and ESYL stock may have finally gone back up to the $50/share mark. The 900 shares of stock you bought for $300, is now worth $45,000!!
Other things to consider: ESYL has been in business for more than 3 years, so this is not some fly-by-night company that is likely to be out of business any time soon. Their main products revolve around electronic entertainment items, which is something that since the advent of the transistor radio, has consistently done well. Look at the people you know as well as yourself; it is very likely that you have some form of electronic entertainment gadget, even if it is a cell phone. Electronic technology is obviously not going to stop their advancements, and electronic entertainment items is something that nearly every one of us have at least one of. To have a brand new product with good reviews, no negative news, and a recently fulfilled contract for $1 million dollars, is generally the sign of a company that is doing well….regardless of stock market scares.
ESYL is just my example for the day. Just wanting to draw people’s attention to the fact that just because governments cant stop spending money that they don’t have, just because the stock market is shaky, it doesn’t mean that there are not some good investments out there to be had. Who knows, you might get a penny stock today that is worth millions to you in the future…..it happened to my grandfather, so maybe it will happen with you….
So ends my thoughts for you to consider……
P.S.: Rumor has it that ESYL is being looked at by some very large companies for a buy-out. I have heard rumors that companies such as Sony and Amazon are on this list….