Are there stocks available now that are priced low that could increase the same amount?
In: Economics
I don’t think they were ever considered penny stocks – generally speaking, companies stay privately traded until the shares are actually worth something, and then the company enters the stock market with an IPO.
They were certainly worth much less at one point. But “penny stocks” are usually companies whose stock is considered totally worthless, barring some sort of miracle happening. Even if a company is circling the drain, the stock usually still has some worth just on account of whatever assets the company has to sell off when it folds.
Are there stocks that are priced low now but that will eventually increase in value thousands of times over? Absolutely. Hundreds of them probably. The thing is, nobody can see the future, and the likely outcome is already priced in.
To explain what that means, say you somehow knew *for absolute certain* that Company ABC’s stock, currently trading for $10 a share, would be worth $100 a share in a year. What would you do? Well, first you’d buy all the shares you could get at $10 a share. Then you’d buy all the shares you could get at $11 a share. And you’d keep buying until you either ran out of money to buy more shares with, or until you bought up every last share you could buy for less than $100. And at that point, the future value of $100 would be priced in.
Now, of course, nobody knows for certain what the future holds, and there’s no such thing as a 100% sure bet. But the entire market is always betting on what they think is the most likely outcome. So generally speaking, the price that a stock is currently trading at is the entire stock market’s best guess about how much the stock will be worth in the future.
So, all stock trading is essentially gambling on against the market’s current best guess. All the sure bets are priced in.
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