Quote:
Originally Posted by roastbeef
well, i know there is a difference. i wasn't asking what the difference in chapters is, i was asking if one would look at a company's stock that might go b11 as opposed to b7.
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Of course there are instances of companies worth investing in as they are going through major issues. That said, sometimes with investing it's good to step back and just in plain terms write down what you are considering doing. If your friend or parent came to you and said they were thinking about putting money in a company they know almost nothing about that is going to be going through bankruptcy and they are hoping to "get in on the ground floor", what would you tell them?
IMO if you (as in if some person, not specifically you) are considering making a likely stupid and certainly risky bet (that's what it is on penny stocks entering bankruptcy) on a company like that, you better damn well know exactly what you're doing. I cannot personally imagine doing so unless you have a vast knowledge of the industry the company operates in, what the market conditions and factors are, what their product is, how competent their management is, and a whole lot about the finances and reasons for bankruptcy and if their is a legitimate plan for restructuring after CH 11. If you don't have enough information where you could write a comprehensive analysis, you are absolutely making a blind bet where the odds are incredibly well stacked against you. You won't win, and if you happen to get lucky it will most likely never happen again. Though you will almost certainly be so cocky about your ability to make picks you'll make an even worse bet the next time expecting more luck.