When I was younger I used to feel a sense of confidence when writers and musicians I liked were mentioned on TV or the radio. It made me feel like I was either “in the know” or was somehow ahead of the curve.
I must admit, I feel that same sense of security when I hear that other penny stock investors are optimistic about 2010. It makes me feel as though I haven’t overlooked something or read into something in a totally obtuse way. Or if I have…I’m not alone.
While opinion is not fact, it’s nice to have some strength in numbers.
A Reuters/University of Michigan "Surveys of Consumers" article I was reading noted that more U.S. investors believe the stock market is poised to rise in the year ahead than at any time in the past two years.
The probability of further gains in stocks, even after a spike of more than 65% on the S&P 500 from its lows last March, was judged as more likely in January than any time since the end of 2007.
The most positive, or optimistic group of investors, came from households with lower incomes and lower wealth in terms of home values and stock portfolios. Or the group I simply like to call, ordinary Americans that invest in penny stocks.
"While this may simply signal a catch-up among small investors, it may also signal greater hesitancy among those who are most able to invest more substantial amounts in the market," said Richard Curtin, Director of the surveys.
Strength in numbers is one thing…it also doesn’t hurt to have economic comradery from on high.
In discussing their 2010 outlook this week, the Vatican said that the economy, and its finances, are showing signs of improvement as the economic crisis ebbs. The Vatican said it had “substantially overcome the difficulties of previous financial years, enabling it to look to the future with greater confidence.”
Pope Benedict XVI dropped in on the meeting for awhile, “listening with great interest to their observations, thanking everyone concerned.”
The Vatican ran a deficit in 2007 and 2008 as its finances and donations from across the world were hit by the downturn. As a point of interest, the Vatican has published annual figures since 1981, in part to debunk the idea that it is rich.
While it certainly wouldn’t hurt to have the Vatican or Federal Reserve Chairman, Ben Bernanke, toss out the names of a few penny stock companies I’m watching – I’m also pretty sure it isn’t going to happen.
In lieu of that, and without help from above, here is a Canadian penny stock company that has reason to be optimistic going forward. Of course, your own due diligence is a necessity…
Magma Energy Corp. (–TSX: T.MXY, Stock Forum) is a geothermal pure play penny stock focused on becoming "THE pre-eminent geothermal energy company in the world." Lofty goals for any sized company but I think Magma has the management team to take it there.
Ross Beatty, the company’s President and CEO has a past record of success that includes selling Equinox to Hecla Mining (NYSE: HL, Stock Forum). More recently, he built Pan American Silver (NASDAQ: PAAS, Stock Forum; TSX: T.PAA, Stock Forum) into the world’s largest silver producer.
Magma went public last summer and at the time it was the biggest Canadian IPO of the year. The company currently has a market cap of approximately C$450 million.
Magma is still an early stage company in terms of operations. But its is actively acquiring established geothermal properties. The company has an extensive portfolio of properties throughout the western United States, Iceland and Latin America, including one operating power plant in Nevada and an interest in two other operating power plants in Iceland.
A geothermal penny stock company may not be as shiny as solar or as sexy as oil and gas, but the fact is, the potential for geothermal within the U.S. is massive. With all the much deserved hype around renewables, it's surprising more penny stock investors aren’t aware of the potential in geothermal energy companies.
Finding a well run energy play like Magma should warm the cockles of any penny stock investor’s heart.