Cheap vs Expensive Stock Debate

Cheap vs Expensive Stock Debate

Leaders vs Losers

 

You are given $1,000 to invest, and you are given only two options :

 

Option A. 1 Share of a $1,000 name like Amazon

Option B. 1,000 shares of Dog Shit Inc for $1 a share

 

Now they both increase by 10%, which made more money? A or B?

 

The answer is they both increased the same.

1 share of $1,000 share of Amazon stock increased by 10% is now worth $1,100

1000 shares of Dog Shit Inc. increased by 10% is now worth $1,100

 

More share does not equal more profits, only more money will equal more profits, but wait? You might be thinking if it's the same shit then why does the price even matter at all? Great question!

 

Let's frame this question again however let's focus on the downside which is what most novice traders never worry about until after they click the button for the first time (first trade with real money).  Before that first trade, most tend to be the cockiest guy around, maybe he had a few killer demo trades or he read a chapter of “Getting Back to Even” by Jim Cramer. Once they are in, they quickly start to see that red on the screen and quickly that confidence gets humbled.

So let's reframe that question again: Which is more than likely to get cut in half in 1 day?

$1,000 a share Amazon that is worth $500 Billion

Or

$1 a share Dog Shit Inc worth $1 million

 

Dog Shit Inc right? Fun fact, in the history of the Dow Jones Names (top 30 companies in the USA) only one has gone bankrupt in 100 years while being a Dow 30 name. Want to guess how many Dog Shit Incs have gone bankrupt in that span? Hundreds of thousands. You can play with the suckers at the slot machines or trade with the professionals, choice is yours.  

 

Smart vs Dumb Money Video Lesson



Do you have balls?

 

In the Getting Started Group Chat share an experience you had trading penny stocks and what you learned from it, if you haven't traded penny stocks share what you learned from this lesson.

 

POST IN THE GETTING STARTED CHAT

Save

4 comments

  • You should take part in a contest for one of the best blogs on the internet.
    I will highly recommend this website! https://vanzari-parbrize.ro/parbrize/parbriz-iveco-daily_iv_platform_chassis-2006-238153.html

    Parbriz Iveco Daily II Estate
  • I’ve been browsing online greater than 3 hours today, yet I by no
    means discovered any fascinating article like yours.
    It’s beautiful price enough for me. In my view, if all webmasters and bloggers made
    just right content material as you probably did, the web will be much more useful than ever before. https://vanzari-parbrize.ro/parbrize/parbriz-skoda-roomster_5j_-2010-164087.html

    parbrize skoda hed-up display
  • After looking at a handful of the articles on your web site, I really appreciate your technique of
    blogging. I saved it to my bookmark webpage list and will be checking back soon. Take
    a look at my website as well and let me know your
    opinion. https://vanzari-parbrize.ro/parbrize/parbriz-renault-clio_iv_bh_-2017-53444.html

    Parbriz Clio 4 2018
  • After looking at a handful of the articles on your web site, I really
    appreciate your technique of blogging. I saved it to my bookmark webpage list and will be checking back soon. Take a look at my website as well and let me know your opinion. https://vanzari-parbrize.ro/parbrize/parbriz-renault-clio_iv_bh_-2017-53444.html

    Parbriz Clio 4 2018

Leave a comment