Penny Stocks COLV and GNOM

Yesterday we alerted you to two penny stocks that would move today: COLV on the Pinks Sheets and GNOM on Nasdaq. Both moved. COLV closed up 30%, GNOM up 21%.

But your response with these two stock picks was divided between the first few hours of trading and the last few.

At first, everyone loved COLV, which rocketed out of the gates hard, gapping up, and within the first 30 minutes ran more than 100%. One reader wrote that he made a quick $400 on COLV in 15 minutes and was out.

GNOM on the contrary got off to a slow start, up about 4% at the open.

One subscriber said, “I bought GNOM, made $50 and sold. What kind of pick was that?”

We wrote back saying GNOM was a Nasdaq stock, that gains in it would be less than an OTCBB or Pink Sheets stock, but the risk of losing money would be less as well. It’s the Iron Law Of Finance: Higher Risk, Higher Reward. But the corollary holds too, Lower Risk, Lower Return.

As the day progressed the situation reversed, and so did the emails.

“I bought COLV at the high and now it’s slipping. You guys suck,” wrote one of our friends. And we were truly sorry to hear that. Buying at the high and seeing your stock slip really stinks. But those that bought COLV at the open managed to sell and make some money like our reader who made $400 in 15 minutes. If you take a chance with a stock after it runs more than 100% in 30 minutes, it’s bad timing. Trading gapping stocks is always tricky as we’ve mentioned before.

We knew that COLV would move strong today and that’s why we mentioned it in our email yesterday. And move strong it did. We also advised at the same time to be careful with gapping stocks. Timing is everything and much as we would like to, it’s hard to give personalized advice throughout the day. We would have bought COLV and sold it quickly watching what was happening. It’s hard to communicate that in the heat of the moment.

Meanwhile, GNOM, slow and steady kept chugging and those that bought and held made a cool 20% on their money by the end of the day. Not bad at all. “THANK YOU, THANK YOU, THANK YOU,” wrote one of our subscribers at the closing bell.

And so it goes. The reality is that neither COLV nor GNOM were one of our real penny stock picks. They were stocks that came up on our radar yesterday that we thought could be good plays. Stocks that we would take a chance with ourselves. In the past, we wouldn’t send these alerts out to you, but many of you have asked for more regular quickie picks and so we are issuing them.

Our own special picks are winners but we alert them only after considerable due diligence and research, which includes meeting company officers and visiting company facilities. By their nature, our picks are infrequent. Everyone makes money but we can’t issue them every week.

We will continue alerting you to “quickie picks” but please realize that it’s important to be nimble during fast moving situations like COLV, and recognize that Pink Sheet stocks are more volatile than Nasdaq ones. Still, ideally everyone should make money no matter what stocks we alert on.

We should have one of our own special penny stocks picks in a few weeks.

Hoping all’s great and that 2012 is off to an awesome start. We are glad to have you with us and always appreciate your comments and feedback.

Jeff Mirkin
Admin
DamnGoodPennyPicks.com