![]() This scenario highlights a confusion about what a cheap stock actually is. When it comes to buying low, after all, you can't get much cheaper than penny stocks, stocks trading below $1. ![]() We've all heard the adage "buy low, sell high," so it makes sense that investors would be drawn to these types of stocks. Many people are drawn to cheap stocks such as these - stocks trading at a low absolute dollar figure. When most investors think of cheap stocks they think of stocks like Elite Pharmaceutical, which sells for $0.37 per share, or Hudson City Bancorp, which trades below $9. He just couldn't get out of his head how expensive Berkshire Hathaway stock was, despite buying into the value investing philosophy. Since so many money managers fail to beat the market, he was definitely interested.īut then he saw the price of Berkshire Hathaway's Class A shares - way above $200,000 per share! - and stopped dead in his tracks. I told him about Buffett's fantastic record, the inherent diversification that comes with buying Berkshire Hathaway stock, and the likely returns going forward. His ears perked up, wanting to hear more. When my father started looking for money managers I mentioned Warren Buffett's Berkshire Hathaway. My Cheap Stocks Sub-Strategy: How to Turbo Charge Your Portfolioĭo You Really Know What Cheap Stocks Are?.Cheap Penny Stocks: Buying Cheap Stocks Relative To Intrinsic Value And On An Absolute Dollar Basis.Cheap Penny Stocks: Why You Should Keep An Eye On Intrinsic Value.Cheap Stocks Relative to Intrinsic Value Represent Systemic Weaknesses in Human Psychology.Cheap Stocks Relative to Dividend Yield.Cheap Stocks and the Essence of Value Investing.Do You Really Know What Cheap Stocks Are?.Ironically, this fool's game is far more popular with the public.īoth bets fall under the general strategy of buying "cheap stocks" but, which you choose will have an enormous impact on your long term results. There's another bet, however, that's sure to devastate your portfolio the longer you keep making it. There's a sure bet in the stock market that almost nobody plays which will virtually guarantee large investment returns. Will cheap stocks make you rich, or destroy your portfolio? Article image (Creative Commons) by schizoform, edited by Net Net Hunter. Get full access to our VIP Newsletter right now, for FREE. Fun fact: He also sometimes writes about home renovations. Evan has used lessons from Warren Buffett, Benjamin Graham, plus other top investors and academic studies to select stocks for his own portfolio and make those stock available on Net Net Hunter’s VIP Newsletter. In 2014, Warren Buffett explained that the net nets he bought in the 1960s helped him achieve the highest returns of his career. Evan is a small investor employing Graham's highest performing value investing strategy, net net stocks. This article on cheap stocks was written by Evan Bleker. Cheap Stocks: Financially Devastating or Fantastic?
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