I was informed by a friend of mine regarding a new investment opportunity - (IVOB) from a company called InvoBioScience. They make an alternative form of fertilization which would have a lower final cost to the patient, as well as a lower implementation overhead cost for the clinic adopting such fertilization technology.
You can find more information regarding the company here.
This started as a Penny Stock - meaning that at 20 cents a share, it was one of the bargain, cheaper stocks that promised short term realization for those brave enough to dump in large amounts of money into a company that was still applying for FDA approval for several years now.
Then in the beginning of May 2015, the stock value skyrocketed and touched 60 cents (this is when I bought it). A day later after hitting the magic 60 cents, as of 05/05/2015 it dropped to 30 cents a share (opening was even lower than that), causing investor panic.
What I found out was the sad truth about penny stocks - people are not researching about companies, they are looking at profit margins and dividends. As soon as they have a significant capital realization they will "jump ship" and cash in their profit (at 300% I can't say that I blame them).
On the other hand, I'm looking for a more long term approach - I researched the company and believed in it - I like being involved in the stock that I purchase.
The lesson of it all? Learn not only about the company, but also about the investor public - in this case, because the stock asking price was so low, a large amount of investors would jump as soon as the stock price went up significantly - maybe it would be a good indication that a drop was coming.
So lesson learned: wait for it to drop, depending on the investor audience. People will often be scared or too greedy and want to cash in - even before the big break (in this case, IVOB being approved by the FDA) so it makes little sense to buy it high (even if the reasonable expectation is that the stock will go even higher than that).
