The fall of a pumped penny stock

I have previously written about Continental Fuels (OTC BB: CFUL) a number of times. I called it the most overvalued penny stock I had ever seen when it was trading around $2.50 per share (although there are now some good competitors for that honor). When its stock price had fallen to $0.70 per share, I said it remained 100-times overvalued. With a current stock price of $0.05 per share, I can finally say that the stock’s inevitable fall is mostly over (although it would still be a poor investment).

The moral of this story is do not invest in over-hyped stocks. Do not invest in stocks mentioned in spam emails, junk faxes, or junk mail. Do not invest in any individual stock unless you have read and understood its financial statements. For those who are not savvy investors, don’t worry: just invest in broad-market index funds and you will do better than most investors and mutual funds.

Disclosure: I have no position in CFUL.

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