Financial Reflections

In a previous entry, I decided to purchase a stock pick that was sent to my fax machine at work.  I only did the purchase on paper, not laying any actual money on what I was pretty sure was a dubious stock to start with.  Here’s how things have gone now that over a month has passed…

I sensed there was doom on the horizon for my imaginary money when I first went to look the stock’s history up.  I punched in the stock symbol and was told that the symbol now went with a “.OB” extension.  After a little searching, I found out that the .OB extension means that a stock is “Over The Counter.”

Here’s what Matt Krantz, Stock and IPO reporter for USA Today had to say about Over the Counter stocks (second question from the top of the page):

“Regulators have routinely cautioned investors from investing in stocks that are not listed on a major exchange: Nasdaq, New York Stock Exchange and American Stock Exchange. Stocks that are listed on the bulletin board or pink sheets are easily manipulated and lightly regulated. My advice: avoid them completely.”

Nevertheless, I mock purchased 1,000 shares.  Here’s my initial investment:

• 1000 Shares
• $2.90 purchase price
• $2,900 total investment

And where it stands now:

• 1000 shares
• $2.20 current price
• $2,200 current value

Current standings: -$700.  That’s a pretty big loss for just one month.  In fact, the stock hasn’t gone up to my knowledge since I sarted tacking it.  I’ll keep tracking it, and if anything major happens, I’ll report it.  But for now, it’s a lesson I’m glad I learned with play money instead of the real thing.