Making Dollars With Pennies: How The Small Investor Can Beat The Wizards On Wall Street, Second Edition [Paperback]

R. Max Bowser (Author)

Book Description

Publication Date: September 1, 2004 | ISBN-10: 1928877036 | ISBN-13: 978-1928877035 | Edition: 2

"Making Dollars with Pennies" introduces the reader to the world of low-priced profitabel companies that have rewarded investors in both up and down stock markets.

Editorial Reviews

About the Author

Mr. Max Bowser is the editor/publisher of "The Bowser Report", which was started in the 1970s and is the only investment newsletter for stocks $3.00 a share or less and also the author of the book, entitled: "Making Dollars with Pennies"; or "How the Small Investor Can Beat the Wizards on Wall Street".

In 1990, he inaugurated "The Bowser Directory of Small Stocks", which is a computer-generated compilation of between 700 and 800 low-priced equities.

In 1995, "The Bowser Warrant Register" was launched. The only newsletter for warrants for $3. or less. It's a very interesting way to make money.

Mr. Max Bowser invested his own money in his penny stock recommendations. He started his portfolio investment in July, l986. He invested $4,454 of his personal money. In ten years the value grew to nearly $40,000, almost a 791% gain. His recommendations are clear cut and well supported by analysis. His book reveals his successful game plan.

Born in Celina, Ohio, Mr. Bowser exhibited an early interest in journalism. He was editor of his high school newspaper for three years. After high school, he worked on weekly Ohio newspapers, first in Coldwater and then in Eaton. On the "Eaton-Press-Review", he was the editor and a "string" correspondent for the Associated Press, the "Dayton Journal-Herald" and the "Cincinnati Times-Star". Later he was employed on newspapers in California: Monrovia, Arcadia and in the San Fernando Valley. His newspaper career was interrupted, however, by military service. During a tour in the Air Force, he went from headquarter clerk to an intelligence officer. He served a total of 24 years and retired in April 1970 with the rank of Lieutenant Colonel.

His first step in a new career was to go to college to broaden his business background. In the spring of 1973, he graduated magna cum laude from Thomas Nelson Community College in Hampton, Virginia with two associate degrees--one in accounting and one in business administration.

From 1973 to 1979, he further studied the stock market, refining his techniques for investing in low-priced equities. It was also during this period he decided to concentrate on stocks selling for $3.00 a share or less. Too, he then determined the format for the newsletter, principally by mailing it to a select group across the country and considering their various suggestions.

Although it initially only had 40 paid subscribers, "The Bowser Report" is now in the top 3% circulation-wise among the hundreds of investment newsletters.

In his new book; "Penny Stock Winners: True Stories of Successful Investors", Mr. Bowser interviews individuals who have successfully made money following the Bowser "Game Plan". There is a housewife who have financed her family's annual vacations with her penny stock winnings, a single mother who made a bundle with stock warrants. The personal stories are related of 15 penny stock winners. This 230 page book also includes interviews with investment professionals, most of whom have had successful experiences with the stock of small companies. --This text refers to an alternate Paperback edition.

Excerpt. © Reprinted by permission. All rights reserved.

Preface.
We hope you learn one thing from this book. That is, there is a way to make money in minipriced stocks. Use the Bowser Game Plan.
We have been studying low priced stocks for three decades. All of that experience. All of that accumulated information. All of that has been filtered down to the Game Plan.
Tha Advantage of the Game Plan are manifold.
1. These small cap issues are considered risky. But, the Game Plan controls the riskiness. Through diversification. We suggest you build a portfolio of 12 to 18 of these stocks.
2. You do not have to do the research. We do. Each month in "The Bowser Report" we examine a company in great detail. We call it the Company of the Month.
3. After you buy a stock, you don't have to wonder how the company is doing. We follow up with pertinent information on each stock that we recommend.
4. When do you sell? That is the most difficult part of stock market investing. We tell you when to sell.
4a. If the stock does well, The Plan calls for you to sell half of your holdings. That way you liquidate most of your original cost. Then you track the stock's progress. If it drops back 25% from its most recent high, you sell the remainder.
4b. The stock does not do well. The company's fundamentals have deteriorated. Then, in our newsletter we tell you to sell.
5. Your portfolio can be self financing at a certain point. The sale of stocks generates funds. These can be used to buy more stock.
6. However, you may have additional funds that you want to put into these stocks. This money can be used to increase the number of shares that you buy once you have reached your goal of 18 different issues. Or, you can average down on those stocks that you think have been unwittingly forced down in price.
Finally, there is a psychological aspect to The Bowser Game Plan. In fact, it's psychological factors that doom the efforts of many people who want to succeed in buying and selling individual stocks.
The first deadly disease is "irrational expectations". It is closely aligned with greed. It's evident when individuals put most of their money in one stock. Because of the leverage that comes with these small stocks, they hope to make a quick killing.
They put $5,000 into a $2 stock. that gives them 2,500 shares. At $10 a share, their $5,000 has jumped to $25,000. Wow!
But, that $2 stock may go down to $1. They've lost half of their $5,000. Putting an equal amount into 12 to 18 different issues eliminates this danger.
The second deadly disease is impatience. If they don't have a fat profit in six months, they throw up their hands in disgust. Be patient. Sometimes it takes two, three or four years for some of these stocks to blossom. Most of the portfolios that we have operated did not do well in their first year.
One more note. It can be fun building a portfolio of minipriced stocks. You'll have your moments of anguish. And, of great delight. But, most importantly, it'll be rewarding.
R. Max Bowser --This text refers to an alternate Paperback edition.

Product Details

• Paperback: 196 pages
• Publisher: Marathon International Book Company; 2 edition (September 1, 2004)
• Language: English
• ISBN-10: 1928877036
• ISBN-13: 978-1928877035
• Product Dimensions: 8.5 x 5.5 x 0.6 inches
• Shipping Weight: 10.4 ounces (View shipping rates and policies)
• Average Customer Review: 3.5 out of 5 stars  See all reviews (14 customer reviews)
• Amazon Best Sellers Rank: #800,789 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

49 of 51 people found the following review helpful:

4.0 out of 5 stars An Unusual and Refreshing Approach to the Market..., December 7, 2001

By 

aseclyst (New Jersey) - See all my reviews

This review is from: Making Dollars With Pennies: How the Small Investor Can Beat the Wizards on Wall Street (Paperback)

This is possibly the worst written book that I could conceive of giving four stars. The reason I am rating "Making Dollars with Pennies" so highly is due to its content and because Max Bowser, who has been publishing his "Bowser Report" for over 25 years, is the real deal. Actually, the book is a quick and easy read, with a folksy demeanor. No high finance here. The book may be most helpful for people who have already been in the market for a little while (and perhaps been burned). The book is weak as a work of literature due to its poor organization and repetitiveness (stressing diversification among 12 to 18 stocks several times).

I believe that to succeed as an active investor in today's market, you need some kind of an "edge" or a niche. One way to obtain that is to focus on stocks trading under $3 per share, as Max does. Let the book serve as your trail guide into the jungle of smaller stocks. While Max rails against the studious ignorance among institutions of these supposedly risky shares, in practice he is quite careful about what he does. Although the selection of new issues is somewhat shrouded in mystery (with Bowser encouraging readers to subscribe to his monthly report in order to get new picks) he gives sufficient detail of his "Bowser Rating" system to uncover his thought process. Two significant ways Bowser reduces risk of investing among smaller stocks is by having a bias towards companies with strong balance sheets and a consistent record of past earnings - no development-stage, long shot concept stocks here.

One important caveat to keep in mind about Bowser's system is that it was honed during the mid-to-late 70s, when treading water was often difficult. To the extent that his methodology or conclusions have become stale or outdated, it may trace to ideas he tested at that time. Personally, I find the vintage comforting as our 2000-2010 market may possibly have more in common with the 70s than the 80s or 90s bull runs. Also please note that some of his suggestions, particularly for the mechanics of setting up and monitoring a portfolio, appear to have been made obsolete by the internet.

Aside from diversification, Bowser's possibly most important other safeguard is a formula for selling. First of all, whenever a stock's "Bowser Rating" falls below 8, the stock is sold, forcing an investor to sell companies with deteriorating fundamentals. Secondly, whenever a stock doubles, an investor is encouraged to sell half of his or her position, recouping cost. The remainder of a rising position is then held until it declines 25% from its most recent high.

How have Bowser's picks (from over 25 years of newsletters) done over time? As he says towards the end of the book [p. 157], 47% of the companies are still in business, 26% have been bought out and 27% are bankrupt. Over their holding periods, more recommended stocks have declined than have advanced. However, absent audited statistics, it appears that tiny minorities of winning stocks have more than made up for the losers. These big winners are mentioned in an "honor roll", and include firms such as Semtech, Smithfield Foods and Alpha Systems. The great hope of the investor in small stocks is not that the average pick will do well, but that a small number of them will be big winners - which is why diversification is so important.

"Making Dollars with Pennies" is only a beginning. It is no substitute for doing more work on your own.

13 of 13 people found the following review helpful:

4.0 out of 5 stars An explanation of how the "Bowser Report" picks stocks, September 19, 2004

By 

Daniel Ginensky (Bet Shemesh Israel) - See all my reviews
(REAL NAME)   

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This review is from: Making Dollars With Pennies: How the Small Investor Can Beat the Wizards on Wall Street (Paperback)

I have read several investment guidance books where the only guidance offered is to buy the authors newsletter/consulting/mutual fund/etc. "Making Dollars with Pennies" at least explains the methodology of how the "Bowser Report" picks stocks before recommending that instead of spending your free time analyzing stocks you pay Max Bowser to do it for you.

The "Bowser" system is simple enought to understand and follow, with a list of "buy" indicators that can be learned from any financial page, and most refreshingly a system for when to sell. Although I have my reservations about whether the mechanical application of this system will make money, I have to give Mr. Bowser credit for explaining his system. If nothing else, it is a basis for further esploration.

10 of 11 people found the following review helpful:

5.0 out of 5 stars Great Book, August 7, 2000

By 

Jeffery (Indiana) - See all my reviews

This review is from: Making Dollars With Pennies: How the Small Investor Can Beat the Wizards on Wall Street (Paperback)

I read this "great book" and it showed me the steps to buying and selling penny stocks... The author gives you a wide range of stocks to chose from in his newsletter. You can get a sample copy of the newsletter with the coupon in the back of the book. Get your money's worth here.