Blog : Penny Stock Book Review

by Ed Zwirn on March 20th, 2013

The first collected edition of Shakespeare's plays, which came out in 1623, seven years after the Bard's death, was addressed to "the great variety of readers, from the most able to him that can but spell."

Alright, maybe it's a stretch to compare Invest in Penny Stocks by Peter Leeds to Hamlet, but the book can lay a similar claim to universality. I admit I was prepared to plow through Peter's book and evaluate it on the basis of what it had to teach those who knew less about companies and markets than I do, but in fact I read eagerly through all of its 185 pages, finding myself not only thoroughly entertained, but learning a thing or two about penny stocks in the bargain.

One particular strength of Peter's penny stock book is its Experience Level Rating System, which alerts readers of different skill levels to more basic concepts that the advanced trader may want to skip, as well as tipping off novice readers to more advanced sections they may want to skip until they've boned up on all the stuff for beginners. But whatever your level of expertise, you are sure to pick up a lot of valuable information if you step through all the book's chapters.

I myself learned a lot from the book's last chapter, which deals with technical analysis. While just about all of you will have already understood that penny stocks, by their very nature, trade with much less frequency than shares of larger companies, the book opened my eyes to the fact that volume fluctuation means much more to penny stocks and pointed me to ways in which volumes, along with other company fundamentals, can be used to help determine whether your penny stock has started a long-term rise or has bottomed out. It is only with such information at your disposal that you can make reasonable decisions as to whether to buy, sell or hold.

Another thing I admire about Invest in Penny Stocks is its candor. It goes without saying that Peter is a penny stock enthusiast, but he wastes no time in getting to the bad news about his topic: Not only does he admit he was wiped out in short order after his first attempt (at age 14) to get rich from a penny stock, he also wastes no time in cutting to the proverbial chase: "most people who invest in penny stocks lose money," he admits not far into the first chapter.

But if things were any easier than that, we'd all be rich already, and we wouldn't need to read books like this. By introducing the reader to the concepts used in his Leeds Analysis system, which screens out all but the top 5 percent of the penny stock universe, Peter's book gives you the tools to greatly enhance your shot at earning spectacular returns, whether you are already a financial analyst or someone just starting to learn about how the stock market works.