Should Wiley E. Coyote find himself getting into trading Blue Chips or Pennystocks, we have little doubt he would load his portfolio with shares of ACME. Names and Symbols when Trading Top Penny Stocks, Hot Penny Stocks, Best Penny Stocks or Blue ChipsShould Wiley E. Coyote find himself getting into trading Blue Chips or Pennystocks, we have little doubt he would load his portfolio with shares of ACME. Should Wiley E. Coyote find himself getting into trading blue chips or pennystocks, We have little doubt he would load his portfolio with shares of ACME. We're simply not so sure any smart penny stock trading investor should stick to the economic advice of a coyote. Traders of the two-legged form, regardless of whether they're looking at a penny stock or a blue chip, have a tendency to take a numerous points into mind before investing. Additionally they should.
But a newly released analysis suggests that traders of every stripe have mental short-cuts when it comes to trading...at a time when they should be more rational. Wall Street experts and investors alike are more inclined to buy freshly offered stocks with an easily pronounceable name, say a pair of Harvard University scientists. Two well-known industry professionals found that a stock's overall performance immediately after an initial public offering is apparently linked to how easily investors (small cap, OTCBB, Nasdaq, NYSE, etc.) can pronounce its name and stock ticker symbol. One of the industry professionals stated, "These bits of information give rise to the notion that psychology carries a great amount to contribute to economic theory."
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The two said the effect also extends to stock ticker symbols. For instance, all things being equal, a stock with the symbol BAL should out-gain a stock with the symbol BDL in the first days after an IPO.
"We looked at intervals of a day, a week, six months as well as a year after its IPO," they said. "The consequence was most powerful right after IPO. For example, if you started with $1,000 and invested it in companies with the 10 most fluent names, you would gain $333more than what you would have had had you invested in the 10 using the least fluent."
They identified that their findings do not tell the complete story about the post-IPO victory of a stock, nor are they good signals of long-run performance of a small cap stock.
We don't think you should try to make changes in your stock portfolio based on these findings. The primary factor of this "article" is always to add another part for the puzzle of understanding how the stock markets function.
So, what does this imply to the green and seasoned penny stock investor? It implies you should still take an exhaustive look at any company you find attractive. Additionally, it suggests that, in the early stages at least, it doesn't hurt to find a company with a attention-getting name and ticker symbol to boot.
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