Life on the lower exchanges often involves important financial decisions based on the moral integrity of others. They say that trust is hard to come by in the world we live in, and never could that reign more true in this cellar world of subterfuge where deception is masked behind the innocent vale of non-disclosure. When it comes down to the one essential question that matters the most, the penny stock investor (PSI) must ask himself but one simple question:
"Can I trust this company?"
Verifiable truth is a hard to come by commodity for any company on a stock exchange, but it is particularly true down here on the Pink Sheets and the OTC:BB. Many of these companies are born of humble origins, often no bigger than a 2-man operation pretending to be bigger than the garage they work in. Masking terminology like: "the company," "the Investor's Relations department," "management," etc. etc. are often group-oriented words used to provide the deceptive impression of a much bigger organization.
Press Releases are also typically filled with loaded words to capture the emotional aspirations of the PSI's ambition. Once too often we'll see companies talking about their multi-billion dollar industries that they've just now penetrated. Perhaps this number is precise and supported by a lot of clear details concerning this external fact. Yet as a basic, general rule of thumb: If the details are broad and/or not directly descriptive of the operations of the company, the company is likely fluffing the pillow of the BS it lays upon & had little to share to its suckers... *ahem*.... I mean investors.
However, when the time comes and the rubber hits the road, there will never be an easy template to discerning the truth in each unique situation. The only thing thing we have to go on is reasonable belief, and that belief must always, ALWAYS be in line with the understanding that the company will have a unique competitive advantage in its industry to one day become successful. Treasure "hard" evidence like videos, photographs, and first-hand experiences that piece together an impression of what is going on with your company. Whenever possible, be the one to commit yourself towards getting that evidence. Be skeptical about opinions given by people attached to the company.
Never get caught up in emotion. Always ask yourself twice why it is that you believe what you believe? Can you independently verify the external evidence? A well-oiled-machine-of-a-company will begin to trace a map of external evidence along the course of its progress. Reasonable belief is only built upon the pillars of external confirmation.
How strong is the foundation of your company?
Can you believe their story?
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