Since starting with PennyStocks.com aprox. 3 months ago, I had a 109% cash gain to my account, this by following the stocks closely and following (not all) but most of your advices, keep up the good work! Also I realize the gain was made in troubled time for the nasdaq and world wide stock market, so I am impressed.
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Playing Currency Effects
September 12th, 2006
OK, here is where your penny stock strategy kicks it up a notch. You really want to make money like the pros, check this out.
There are a lot of penny stock companies based in Canada, that sell products or services to the U.S. market. They make their income in US dollars, then spend that income on their expenses in Canada (salaries, electronics, office space...). They benefit from the exchange rate between U.S. and Canadian dollars.
If a U.S. dollar is worth 1.10 Canadian, they can make $1.00, then buy $1.10 worth of supplies or whatever.
The bigger the difference in exchange, the bigger the advantage for a Canadian based company that sells to America.
Recently the Canadian dollar got really strong, based mainly on high resource prices (oil, gas, gold...). This is because Canada has so many resources, that their economy is tightly tied to resource prices.
So, for a technology company based in Canada, they used to be making $1.40 per dollar, but now with the strong Canadian dollar, they are only bringing in the equivalent of $1.10 per dollar. Many of these penny stocks have reported weak financials, mainly because of the shifting exchange rate.
There is no underlying problem with the penny stock company. Rather, many are doing well but their strong progress is hidden / dampered by the unfavorable exchange rate.
So, what happens now?
Canadian dollar trends back to it's historical 'at rest' range, which puts it around $1.25 per US dollar. These Canadian based tech penny stocks suddenly have an increase in revenue of 20% or so, on top of any operational progress they have been making.
This results in increases in share prices of the underlying penny stocks.
Take Absolute Software for example (ABT on Toronto Stock Exchange). ** I personally own this one.
There are a few on our penny stock Hot List as well.