Penny Stocks 101
Microcap stocks, also known as penny stocks, are stocks that are trading at less than $5 each with small market capitalizations typically under $300 million. More specifically, as Doug Casey defines it here, many of these types of stocks are more accurately defined as speculations rather than investments. They have no earnings or predictable cash flow, and can’t be evaluated in the ways that Benjamin Graham or Warren Buffett may value a company.
Casey, a legendary speculator, is also well known for saying that he would rather risk 10% of his portfolio for a potential 100% gain, rather than 100% of his portfolio for a 10% gain. The above infographic covers some of the ins and outs of trading such stocks, and many of the ideas presented can apply to junior mining, energy, and technology stocks.
From a potential downside perspective, many of the companies in this category can be risky, unpredictable, and thinly traded. However, for savvy speculators, these same stocks can provide upside that is hard to match. It is all about the approach.
Microcap stocks are inherently volatile, but for those that can stomach it, there is a big profit opportunity. Furthermore, hidden in the market are companies that do have game changing plans or discoveries that could see their valuations rise more than 10x (a ten-bagger, as industry people call it). The key is being able to put in the time, due diligence, and using the right strategy to discover these companies. Being able to let go of opportunities that did not work out by cutting losses early can also be a key.
Original graphic from: Timothy Sykes
Survey Results: Will Global Stock Markets Crash in 2023?
How likely are the stock markets to crash in 2023, according to different countries? And how have those predictions changed over time?
Survey Results: Will Global Stock Markets Crash in 2023?
For the upcoming year, expert predictions have ranged from extreme optimism to not-so-subtle nervousness, especially when it comes to gauging the health of the global economy.
This chart from Gilbert Fontana skips past expert predictions, and looks directly at those of citizens in multiple countries around the world.
Using data from the Ipsos Global Advisor Predictions surveys from 2019‒2023, the chart plots the percentage of average citizens that think global stock markets will crash in the upcoming year.
The annual reports used to generate the charts draw from a 36-country survey of more than 24,000 adults. Each country shown had at least 500 individuals sampled, with countries in the G7 and other major economies including China, Brazil, and South Korea having approximately 1,000 individuals sampled.
Specifically, respondents were asked a question on whether “major stock markets around the world will crash” in the following year, and were asked to respond either “likely” or “unlikely”.
Responses were collected at the end of the previous year in question. For example, for 2023, survey data was collected in October and November 2022. Responses of uncertainty or non-answers weren’t included in the chart above.
And across the board, each country’s data was also weighted to accurately reflect its demographic profile according to recent census data.
Stock Markets Crash Predictions By Country
When looking forward to 2023, most of the respondents from around the world felt that the likelihood of global stock markets crashing was more likely than unlikely.
|Market Crash Predictions by Country||Likely (2023)||Unlikely (2023)|
|🇬🇧 Great Britain (United Kingdom)||47%||30%|
|🇸🇦 Saudi Arabia||51%||29%|
|🇿🇦 South Africa||63%||23%|
|🇰🇷 South Korea||52%||37%|
|🇺🇸 United States||47%||31%|
|🌎 Global Average||50%||31%|
In 24 of the 27 countries sampled, citizens thought it was more likely than not that global stock markets would crash in 2023. This includes the entire G7, with 40–47% of each member’s citizens responding “likely” compared to 26–35% responding “unlikely.”
The most pessimistic responses came from Malaysia, Poland, and South Africa, where more than 60% of respondents thought it was likely that markets would crash in 2023. Malaysian citizens led the way with 71% viewing a 2023 crash as likely.
The only three countries where citizens believed a 2023 stock market crash was less likely were China, Israel, and Hungary. China had the highest “unlikely” response rate at 50%, while in Hungary, just 33% of respondents responded “likely” compared to 47% responding unlikely.
Changing Stock Market Sentiments
When comparing 2023 responses to those from 2019, we can see that the last five years have brought uncertainty and pessimism to most countries:
|Change in Market Crash Predictions||% Likely Change (2019-2023)||% Unlikely Change (2019-2023)|
|🇦🇷 Argentina||+20 pp||-18 pp|
|🇦🇺 Australia||+15 pp||-15 pp|
|🇧🇪 Belgium||+09 pp||-12 pp|
|🇧🇷 Brazil||+11 pp||-11 pp|
|🇨🇦 Canada||+12 pp||-13 pp|
|🇨🇱 Chile||+32 pp||-23 pp|
|🇨🇳 China||+12 pp||-09 pp|
|🇫🇷 France||+06 pp||-05 pp|
|🇩🇪 Germany||+10 pp||-07 pp|
|🇬🇧 Great Britain (United Kingdom)||0 pp||-02 pp|
|🇭🇺 Hungary||+09 pp||-08 pp|
|🇮🇳 India||+26 pp||-24 pp|
|🇮🇱 Israel||+03 pp||0 pp|
|🇮🇹 Italy||+11 pp||-08 pp|
|🇯🇵 Japan||-04 pp||-06 pp|
|🇲🇾 Malaysia||+07 pp||-09 pp|
|🇲🇽 Mexico||+20 pp||-21 pp|
|🇳🇱 Netherlands||+03 pp||-09 pp|
|🇵🇪 Peru||+30 pp||-23 pp|
|🇵🇱 Poland||+21 pp||-18 pp|
|🇸🇦 Saudi Arabia||+03 pp||-11 pp|
|🇿🇦 South Africa||+28 pp||-26 pp|
|🇰🇷 South Korea||+26 pp||-26 pp|
|🇪🇸 Spain||+18 pp||-05 pp|
|🇸🇪 Sweden||+04 pp||-02 pp|
|🇹🇷 Turkey||+05 pp||-06 pp|
|🇺🇸 United States||+09 pp||-15 pp|
|🌎 Global Average||+13 pp||-13 pp|
Responses of global stock markets likely crashing rose in 25 of the 27 countries, with 8 countries increasing by more than 20 percentage points (pp). Notably, neighbors Chile and Peru had the highest increases at 32 pp and 30 pp respectively.
But neighboring sentiments didn’t track worldwide. For example, while South Korea had one of the biggest increases in “likely” responses towards stock markets crashing at 26 pp, Japan was the only country that responded in a lower likelihood by 4 pp.
While global sentiment is becoming increasingly pessimistic, we can also see that previous year’s predictions didn’t always pan out. So the question remains, what will 2023 really bring?
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