The problem is you can't sink much money in these speculative picks. If you have a portfolio worth $100K would you gamble all that money in these stocks?
No, I would not gamble 100,000 into these stocks. Instead, I would gamble 5-10k in these stocks. Think about this. Indymac, at 2 dollars with an investment of 5000. In a year, it might be 10 dollars. 5X5000=25000 $20,000 gain Indymac at 0 dollars after bankruptcy filing. $5000 loss Not all of us on this message board are hedge fund and institutional traders making a million a year. I would greatly appreciate 20 grand in one year off of such an investment. Investing all of your cash into one equity using margin is simply stupid if thats the point you are trying to make. Dont do it. However, you have to be ready for both sides of the coin. You will either have a multi-bagger gain or a wild loss...
When a stock sells down from the 40s to the ones, I tend to think there is a chance of bankruptcy. So with that said, if the price can get over that bar on the chart then I think it has a chance to get back to 3. I was reading in the 10-Q something about Indymac diluting the float by selling shares to the public and so some of that red volume might be just that. It appears the sell volume has dried up. If you bought at 1.7 a few days ago, then your looking at a 17% gain.