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There's a stock exchange out there with a bad reputation.
You might think of it as a warren of shady penny stocks and unregulated "pink sheets" that are subject to easy manipulation and other schemes.
And the Federal Bureau of Investigation doesn't think much of it either. G-men are cracking down on alleged fraud here involving dirt-cheap, thinly traded microcap stocks.
The reality, however, is that some of the world's largest and most successful technology and bioscience companies are listed here.
And today, I'm going to explain to you precisely how to tell the difference between the sketchy stocks and the reputable ones.
Even better, I'm going to tell you about one global tech and healthcare leader that not only trades on this exchange, but also offers investors a great "special situation."
There's nothing to fear here – just plenty of upside…
Have No Fear
Of course, I'm talking about the OTC Markets Group. And its reputation has never been worse.
The online resource Investopedia sums up the prevailing attitude toward over-the-counter shares by warning that they "are either penny stocks or are offered by companies with bad credit records."
And OTC stocks are making headlines right now – and not in a good way.
The FBI recently divulged details of its "Operation Pennypincher" sting.
Concerned that investors are getting fleeced in get-rich-quick schemes involving microcaps, the feds set up this sting to catch and prosecute stock manipulators. Operation Pennypincher has lasted more than a year so far and still has cases pending in the courts.
To date, 22 people have been charged criminally. Of those, 18 have pleaded guilty or been convicted on various counts of fraud. The stocks in questions traded for as little as $0.05 a share.
With their bad reputation, you may be surprised to learn that some OTC stocks are more expensive than Apple Inc. (Nasdaq: AAPL) and have bigger market caps than Netflix Inc. (Nasdaq: NFLX).
That's because OTC Markets has three "marketplaces," only one of which truly caters to "pink sheet" penny stocks – so called because information about these microcaps used to be printed on pink paper.
Here's the secret to finding winners trading OTC…
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top technology financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
Michael is 100% independent and receives absolutely no compensation from companies he writes about. His ideas are completely his own.
So, it probably goes without saying that you won't ever be left in the dark about breaking innovations, ahead-of-their-time technologies, and breakout companies on the cusp of changing the world once you join this world.
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