Penny Stock Fortunes

Winning With Penny Stocks

It doesnt matter if you attended an Ivy League university, community college or only high school. You dont
need education to be a great investor using Penny Stock Fortunes. You only need to be smart. Theres a big difference
Youve already taken the first step toward investing success by subscribing to Penny Stock Fortunes. Now all
you need to do is learn how to use the many tools at your disposal to rack up huge gains in the stock market.
But first, its important for you to learn how to avoid some of the pitfalls that trap many investors every single
day

The Truth About Wall Street

You hear it from talking heads on TV, financial pundits, brokers and analysts. They want you to believe that
you have to buy large, expensive stocks, because its how they make money off of you. If you choose to believe
it, it will keep you at the bottom of the financial food chain for good.
This is what they want you to believe: To be a successful investor, you should buy only big-name stocks and
hold onto them for years. Nothing could be further from the truth. What they really want from you is control of
your money. They want you to leave it with them and forget it.
And heres why they hope youll never bother to challenge the myth
Your broker makes money whether your portfolio soars or falls. All he cares about is that youre buying or
selling stocks. He takes his commission and youre left with stocks that could be profitable, but are more likely
just the hot picks of the week that will lead your portfolio down the drain in no time.
But as youre about to see, you can do a lot better. You can win at the stock market when you use the power
of penny stocks to your own profitable advantage. And better yet, you can keep more of your money without
worry that your brokers advice might be costing you more than just your cell phone minutes

The Best of the Best

On Nov. 19, 1984, you could have
picked up shares of the emerging biotechnology firm Amgen Inc. for $3.63.

Feb 1985:

AMGN 0.1406
100
80
60
40
20

At its peak, those shares would

have been worth around $115.00.
Taking into account Amgens five
splits over the past 22 years, you can
knock that original 1984 price down
to about 9 cents a share.
Its almost impossible to believe
that a company that would cost you
pennies could turn into an $80 billion pharmaceutical giant specializing in the treatment of rheumatoid
arthritis, anemia and psoriasis.

1985

1990

1995

2000

2005

2010

Amgen shares soared, and took some savvy investors on the ride of their life...

But Amgen did itand investors who saw its potential laughed all the way to the bank:
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Exposing the Lies

It doesnt take many smart penny stock plays to

make a lot of money, either.

First, its important for you to know that the easiest way to make money in the stock market is by
investing in penny stocks. And there are cold, hard
facts to back up this claim.

This is how you have to play the penny stock market

in order to be successful. You have to swing for the fence
and let your big winners make up for the strikeouts.
But the difficult part is how you find these home runs.

The smallest stocks on the market those with

market capitalizations of less than $2.5 billion have
dominated the market recently, outpacing the large
caps in each of the last seven years. But what many
investors may not realize is that this is not a fluke.
Historically, smaller stocks have always led the market.

In the world of smaller stocks, it sometimes takes

a lot more than simple valuation to measure a companys
potential. After all, a lot of these small companies
arent even turning a profityet. The trick is to pick
out the ones that will, while avoiding the ones that
could be poison to your portfolio.

A famous study conducted by Ibbotson Associates

in the 1990s found that these small stocks outperformed
all other stocks 56% of the time between 19261996
including the blue chip stocks that get all of the medias
attention. The average return in any given year was
14% for small stocks. It was just 9% for large stocks.
And the longer you held your small stocks, the better
off you were.

Luckily, there are some very tangible factors you

can use to evaluate how well some of these penny
stocks can perform.
Every month, youll find usually two recommendations in the pages of Penny Stock Fortunes that meet
the stringent guidelines Ive spent so long perfecting.
This assures you that only the very best small stocks
will be added to your penny stock portfolio.

Since 1926, there has never been a period of 25

years or more in which investing in large-cap stocks
has proven more lucrative than investing in small-cap
stocks. Of course, there are many reasons for these great
small-cap returns.

How do I find these hidden gems? With the

revolutionary CXS System
The CXS System screens every business in the
penny stock universe, looking for businesses that are
primed for explosive growth.

First of all, there are a lot more small-cap companies

on the market. About two-thirds of all the companies
on Wall Street have a market cap of $2.5 billion or less.
So as a penny stock investor, you have a much wider
universe in which to find moneymaking opportunities.

Here are the five points that make up the

CXS System:
1. Top-Line Growth: Our first CXS metric is still
one of the most important things we look at for in
potentially successful penny stock candidates. As
weve told you many times before, great, undiscovered
penny stocks might not be making steady profits yet,
but they should still be growing revenues like wildfire.
Ideally, they would have better margins and profits,
but they should follow as the business strengthens.
The more a company grows in revenue, the closer
well watch it. And when it comes to stocks that
trade for less than $4 and $5 a share, its not totally
uncommon to see 25%, 35% or even 50% revenue
growth over the course of a year.

And because there are so many small companies,

the major brokerage firms and institutions dont have
enough analysts to cover them all. So they simply
ignore some of the fastest-growing companies on Earth.
As a result, you can buy into some tremendous businesses trading for virtually nothing.
Smaller companies can also adapt to the changing marketplace and react quicker than their large-cap
peers. Think about it this way: Its a lot easier for a $200
million company to double than it is for a $255 billion
company to do the same.

2. Profit Fortification: The profit fortress is

another. Its always a good idea to find unique companies that possess some type of unfair advantage
over the competition. Any business that churns out
an ordinary product will eventually lose out to a
company that can do it better, faster and cheaper.
The most successful companies operate businesses

The CXS System

Discovering a companys hidden potential before
anyone else can be extremely rewarding. After all,
getting in before the crowd is what makes a select
few investors rich.
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Winning With Penny Stocks

that may have some type of government protection
or products and services that arent easily duplicated.

Were not interested in medium-risk/medium-return

stocks. The system singles out the most promising
penny stocks looking out 1218 months.

3. Hidden Valuation: How much is the company

really worth? Thats what were trying to nail down
with this metric. We go far beyond simple ratios and
dig deep into the companys financials to figure out
how it will perform compared to its peers, as well as
the market at large.

Risk and return are closely associated in virtually

all investment opportunities. The very nature of penny
stock investing might bring those two even closer
than usual. But with our system, we separate the truly
attractive stocks from much of the noise in the penny
stock marketplace.

4. Business Catalyst: A business catalyst is a

future event that will drive a companys growth.
Everyone hears about future prospects for many of
the blue chip companies, but many times, investors
ignore potential good news for penny stocks. A catalyst for a small biotechnology company could be an
action date by the FDA to approve a new drug. An
approval of a companys first drug is a major step on
the companys way to becoming profitable and its
first step toward making shareholders big profits.

How Much Money Should You Invest in

Each Stock?
Youve received your first issue of Penny Stock
Fortunes. You have read about the profit potential of
your new recommendations and are ready to invest
some of your hard-earned money in the companies.
But how much money should you invest in each
penny stock opportunity?

5. Investor Sentiment: When to buy and when to

sell are two of the most difficult aspects of investing
and naturally, theyre by far the most important. A chart
can tell us a lot about a stocks potential, so this
metric is designed to weed out the companies with
downtrending shares that are falling out of favor with
Wall Street and individual investors. We also look at
institutions and insiders buying as important sentiment
indicators that will help boost a stocks share price in
the short term.

Its one of the most common questions from

beginning investors. And while this appears to be a
simple question, it has no clear-cut answer.
Investing is a personal matter, and there is no way
a newsletter editor can know your individual financial
situation. As a general rule, you should never invest
more than you can afford to lose.
Also, theres no steadfast rule on how you
should invest in these stocks. Some readers prefer to
invest only in one or two stocks a year, while others
try to spread out their investments equally among
the recommendations.

To determine a companys score on the CSX

System, I assign a score of 02 for each of the five
criteria listed above. For example, if a business has
fresh patents and no competitors in a relatively new
industry, it should score a 2 for its phenomenal
profit fortress. If a company is a leader in a highly
competitive field, it should score a 1.

There is no right way to invest. But as a general

rule, it is better to spread your capital out among
several positions, versus one or two. Not only do you
give yourself more chances to hit that home run, you
also mitigate your risk if one stock falls in value.

Add up the scores for all five CXS criteria and

you have the stocks official CXS rating, which will
be somewhere between 010. However, since Ive
promised to give you the very best penny stock ideas
on the market today, you will almost always read
only about companies that score at least a 6 out of
10 on the CXS System.

After all, home runs are what were after here at

Penny Stock Fortunes.
The goal of Penny Stock Fortunes is to give you
plenty of good ideas that can help you make money
without risking a lot of your own money. Thats why
youll almost always receive recommendations only for
stocks that trade for less than $10 a share. This way,
youll always be able to buy a significant amount of
shares in any of the recommended companies.

As youve probably figured out, a perfect 10 is

hard to come by, due to the rigorous nature of the
system. Its a ruthless system, really. It takes solid
micro- and nanocap companies ones that would
constitute acceptable investments and casts them
aside for the top prospects of each trading month.

How to GetStarted
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PENNYSTOCKFORTUNES
At the end of each Penny Stock Fortunes article,
you will see clear instructions for what actions you
should take to make the best investment possible in
each of the recommendations. The instructions will
look like this:
Action to take: Buy shares of Monogram
Biosciences (MGRMD:NASDAQ) at $1.95 or better.
I know all of this might sound complicated. But
take a deep breath you wont be left to fend for
yourself. Youll receive e-mail updates at least once
a week with up-to-the-minute information on all
of your Penny Stock Fortunes picks. In these e-mail
alerts, you will find specific instructions on whether
to buy, sell or hold your open positions. If a stock
starts moving, you can rest assured that you will be
the first to know about it.

Updates
As youve learned, all of the stocks recommended
in Penny Stock Fortunes are put through the rigorous
CXS System before they make it to your door. And we
dont stop reporting on a stock after its recommended.
Once a stock is selected, you will receive information on earnings, price movements and other updates
via a weekly e-mail alert. These alerts will tell you
whether you should hold your position, purchase
more shares (if you wish) or sell a particular stock.
Be on the lookout for supplemental alerts, as
well. With Penny Stock Fortunes, you receive complete
coverage of a stocks performance, not just buy and
sell recommendations. All of this information is
compiled to help you keep track of your portfolio
and to help sharpen your investing skills.
Below is a sample of what a Penny Stock Fortunes
alert will look like:
April 19, 2006
4:00 p.m.
Baltimore, MD

Sell Matritech, Inc. for a Triple-Digit Gain

Dear Reader,
Last Friday, I recommended you place a stop loss
on Matritech Inc. (MZT:AMEX) at $1.16 to protect
your triple-digit gains. Today, MZT triggered
that stop. That means its time to sell.

Action to take: Sell your shares of Matritech

Inc. (MZT:AMEX). If you bought in at the recommended price of 58 cents, you should have
been stopped out for a 100% gain.
Sometimes, the alerts will be short and sweet. Other
times, we will have lots of information and updates on
the progress of your recommended companies.
Remember, you can access archived alerts and Penny
Stock Fortunes issues by going to www.agorafinancial.com
and clicking on the Penny Stock Fortunes link on the
lower right-hand side. If youre ever unsure of anything
or need help, you can always call our friendly customer
service representatives at 1-800-708-1020. Or if
you prefer, you can e-mail them at
psfortunes@agorafinanical.com.

Playing It Smart
You should use only risk capital (money you can
afford to lose) to invest in any stock mentioned in
Penny Stock Fortunes. No matter how great a security
looks, unexpected news or events can send a stock
plummeting. The savvy trader knows there are risks
to any trade. But he minimizes that risk by knowing
that he can afford to lose what hes invested.
Gamblers are known for throwing good money
after bad in order to make up for bad bets. You dont
have to take unnecessary risks with the picks in Penny
Stock Fortunes.
In fact, you could begin your portfolio with a
very small amount of money. Thats the beauty of
penny stocks. You could start investing with only
about $200 and build an impressive portfolio.
If you dont think youre ready to dive in just yet,
paper trading is another option. Paper trading is simply
tracking the price of a pick and simulating buys and
sells on paper without risking actual cash.
This strategy helps you build confidence in the
stocks youre tracking. And youll develop the skill of
being patient and picking the right moments to buy
and sell other stocks you are researching.
It also helps take the emotion out of investing. Since
theres no real money involved, you can focus on the
important strategies mentioned in this report. It will
help you build the habits that make a great investor.
And a great investor is a profitable investor.
400R025553

Copyright by Agora Inc. 808 St. Paul Street, Baltimore, MD 21202. All rights reserved. No part of this report may be reproduced by any means or
for any reason without the consent of the publisher. The information contained herein is obtained from sources believed to be reliable; however,
its accuracy cannot be guaranteed.