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Due Diligence 101 (DUDE)

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Last Post: 9/26/2017 3:27:03 PM - Followers: 31 - Board type: Free - Posts Today: 0

Due Diligence 101 (a work in progress)

How to perform really solid due diligence and other assorted pearls of wisdom for dopes like me that buy penny stocks.


Knowledge is POWER. Educate yourself. If you find something worthy to help educate all means post it. You have a standing invitation to do so. Help make this a better community by helping others to LEARN.

Real investing is WORK. Not physical work, but mental work. Equip yourself. Flex your mental muscles. Don't fall victim to the dangerous idea that you can just follow some other popular investor and do what he/she does and become rich quickly. That is a pipe dream! There are many people in this community that will readily testify to this fact. If you expect to make money buying and selling penny stocks then you need to first invest some time and effort educating yourself about the interesting and unusual OTC world.


Before you begin your journey of due diligence, settle this question in your mind: "Do I really want to buy penny stocks?" Included within that question are more nuanced questions such as: "Should I be buying penny stocks?" and "Why do I want to buy penny stocks?"

Here is something I wrote a while back that might help you answer these important questions: 25 Axioms of OTC Investing (please note well: this is required reading and entirely preparatory toward achieving meaningful due diligence).

About Due Diligence...

When I think about "due diligence," I am primarily thinking of fundamental elements that will cause the stock price to either appreciate or depreciate. When I begin the due diligence process I try to separate the data I'm finding into two entirely separate categories yet with mysterious and unmistakable overlap:

1. What is verifiable fact through filings, documentation, etc. -- we'll call this one the "HARD DATA" category, hereafter HD.
2. What the crowd is saying -- let's call this one the "PUBLIC BUZZ" category, hereafter PB. Think Peanut Butter LOL! wink

Understand the substance of this article as well and why we're sticking with only these two.

Understand the difference between stock fundamentals and technical analysis: HERE and HERE

So, let's do some Due Diligence! (This part is why you're here at this board, trust me). Here is a step-by-step walk-through that will cover the basics and then some...

First, we will discuss places to find HD (that's "Hard Data" did you forget already? Verifiable, factual stuff in filings, documentation, etc.)

  • Determine the ticker and company name (duh)

    Go to and type in the ticker symbol of your company.
    • Determine what "tier" the stock is. Is it current? Is it skull and crossbones? Look for the graphic next to your ticker! Is your stock in a desirable tier or a crummy one? Don't even think of staying invested in a skull & crossbones overnight!
      Note the transfer agent. Write down the name of the agent, the contact there if provided, phone number, and email address if one is given. This is important data!
      Note the share structure under the "Company Info" tab. We will talk about this more in a bit...
      Write down any names you see there: CEO, CFO, Vice President, Secretary, Treasurer, etc, etc, etc. In just a minute you'll be googling all these guys...
      IMPORANT...under "Company Info" tab look for past reverse splits or re-organization. It is worthwhile to google the past companies and see if the current principals are the same ones that pulled those shenanigans.
      Find out in what state your company was/is incorporated.

    Go to the company board on Investors Hub and look in the "intro message box" -- you will almost always find links to places necessary for thorough due diligence. VISIT THE ACTUAL WEBSITES. The information provided in the "intro message box" is often OUTDATED. Seriously...don't ever trust a stock message board for up-to-the-minute accurate due diligence. If some yokel is invested in the stock, and that same yokel finds some data that could positively impact the stock's price...there's a good chance said yokel will post it and cheer about it even though it could be data that is years old! Don't trust anyone except yourself. I can't pound the table enough on this!!!!! Don't be naive.
    Visit the state website of where your company is incorporated. They often have very interesting filings. Most penny stock companies are incorporated in Delaware, Nevada, or Wyoming. A listing of most popular state websites is HERE. If you don't find your state there is a complete listing HERE.
    Determine what level of scumbag the CEO (and other principals involved) really are. All of them are scumbags, by the way...that's simply axiomatic truth. Your job is to figure out if they are small scumbags or really big ones.
    • Start googling. You can do this! wink
      Visit all these boards and search for their name.
      Do a public message search by their last name here on iHub. Like this ONE
  • Get serious about the share structure. Call or email the transfer agent. If the transfer agent is GAGGED (i.e. they cannot give out the share structure) or it is the transfer agent's policy not to give out the share structure information...then make a decision to not be invested for long. Investing in stocks where you do not have ready access to current share structure data is fiscal SUICIDE.

Now let's talk about places to find PB (that is, Public Buzz...or "what the crowd is saying").

"Too much due diligence can ruin a good play!" I will comment on this soon.

  • Remember that you can look up two "different" words that are mentioned in the same post too, this can help you to pinpoint "specific talk". 
    Create a list of things to look to look for. Some suggestions might include..., Dilution, Lie,CEO,Lawsuit,Bad,etc. "To each his/her own" of course. Every stock has it's own unique Universe of language. The negatives come to mind first because that's the problem you have to find and determine. Part of the benefit of using iHub is the ability properly gage investor psych. If you have 20,000 posts this become very useful obviously.
    Consider well all these THINGS  (these will help you answer the question: "Is this company a scam?")

OTC Nirvana! What would the Utopian penny stock pick look like? Find out HERE


Other useful links to help you perform due diligence...

For DD Category #2, "Public Buzz"

Some Promoters/Traders/Other Boards (nuthin' as good as iHub though!!!) (do a search for the specific ticker)

Buzz Detecting Tools (enter symbol in search box) (look at Top 50 DD requests)

Can Retail Investors Short My Precious Penny Pick?

Other Links I Use Regularly
Is my stock on the Reg SHO list?
Reverse Split Repeat Offenders - Good DD tool...
Scammy, scummy stock & IR alerts - with a grain of salt, but decent info here:
ADP Investor Communications (NOBO LIST)
Delaware Secretary of State - For Delaware Corporations
1) Go to: -
Find Articles ( Free and Fee Based )
Monthly Short Interest Reporting List
U.S. Securities and Exchange Commission

Link to all States/Secretary of States:
Links to several presentations on doing technical analyses of stocks:
Daily listing of stocks being pumped by compensated promoters:
Helpful volume analysis linkage:
Time and sales and other data:
Dollar volume:



Misc. Indexes

Daily Updates

Rule 3360:

Market Makers

info on promoted stocks

View FREE profiles of HOT women (and men)...


An interesting an amusing take on bashers and pumpers:


iHub Board to refer to.

More great educational boards here on the hub.

Financial Dictionaries:

Misc. Resources & Reference:

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#228  Sticky Note Please make sure and read the iBox. vantillian 10/04/15 09:42:24 AM
#237   (DUDE) [SMART MONEY] 09/26/17 03:27:02 PM
#236   ~PPPMF was a NYSE stock and $10 now ~ Blue ~ 09/09/17 11:50:20 AM
#235   When looking for more information and feedback from Vinc81 02/07/17 03:38:04 AM
#234   ++++++++++++++++++++COOL++STUFF++BELOW++++++++++++++++++++ vantillian 10/13/15 07:45:49 AM
#233   testing: vantillian 10/13/15 07:43:37 AM
#232   More helpful links here to peruse: vantillian 10/04/15 10:12:05 AM
#231   You're correct. These articles expand on the idea: vantillian 10/04/15 10:03:03 AM
#230   I'll be interested to see that. I try pauljack13 10/04/15 10:01:17 AM
#229   Premiere Alt/Greentech info about stocks, the legislative processes vantillian 10/04/15 09:54:00 AM
#228   Please make sure and read the iBox. vantillian 10/04/15 09:42:24 AM
#227   It's something I started many years ago and vantillian 10/04/15 09:40:26 AM
#226   I just marked this board. Sounds like it pauljack13 10/04/15 09:34:21 AM
#225   Know what you hold: vantillian 10/04/15 09:18:33 AM
#224   Wow I just made four posts here! vantillian 10/03/15 07:40:10 PM
#223   I like to post cool links here that vantillian 10/03/15 07:40:00 PM
#222   I like due diligence. vantillian 10/03/15 07:39:43 PM
#221   Can I please be mod again of this vantillian 10/03/15 07:39:25 PM
#220   GM Pitt, the new products continue to roll RJ Trotts 10/18/11 10:48:12 AM
#219   Great post vantillian 09/05/11 11:27:12 PM
#218   Hey Pitt always great to see you around. RJ Trotts 09/02/11 12:45:42 PM
#217 vantillian 08/17/11 05:09:21 PM
#216 vantillian 08/17/11 04:41:22 PM
#215 vantillian 08/17/11 04:41:09 PM
#214 vantillian 08/16/11 02:55:31 PM
#213   Other Helpful Sites: vantillian 08/06/11 08:22:30 PM
#212   1512g Filings - vantillian 12/03/10 07:38:32 PM
#211   Thanks Van. mercurialmike 11/10/10 09:58:34 PM
#210   It wouldn't prevent you from buying but it vantillian 11/10/10 09:36:19 PM
#209   I'm trying to tell if buying "preferred shares" mercurialmike 11/10/10 06:41:35 PM
#207   China stocks vantillian 11/08/10 07:26:05 PM
#206   Things to consider if you plan on being vantillian 11/08/10 03:44:14 AM
#205   Nicely done, very helpful and coherent. Coherence is mercurialmike 11/07/10 10:34:57 PM
#204   That I can agree w/and that is where mercurialmike 11/07/10 07:33:22 PM
#203   Or if the business is within driving range...just vantillian 11/07/10 06:33:14 PM
#202   Did you see the Welcome box? vantillian 11/07/10 06:31:59 PM
#201   Having good "kool aid" is imperative IMO. If vantillian 11/07/10 06:31:46 PM
#200   Hey, it was late. Good insight Mike, thanks. mercurialmike 11/07/10 04:34:58 PM
#199   That's true. Thus the phrase I'm starting to mercurialmike 11/07/10 04:32:54 PM
#198   Don't forget the lessons of LOL! The Ecomike 11/07/10 11:44:21 AM
#197   Great educational boards here on the hub... vantillian 11/07/10 09:08:06 AM
#196   How big of a scumbag is my CEO? vantillian 11/07/10 08:40:49 AM
#195   Yep. Remember with penny stocks you're not dealing vantillian 11/07/10 08:25:54 AM
#194   Find out about your company! Most penny stock vantillian 11/07/10 08:07:04 AM
#193   OTC NIRVANA. What would be true of the vantillian 11/07/10 08:00:06 AM
#192   Solid post dude! That's why in my mind vantillian 11/07/10 07:34:32 AM
#191   i just realized what I would call the mercurialmike 11/06/10 06:25:44 PM
#190   Requested to change the name of this board vantillian 11/05/10 10:03:24 PM
#189   Stock Message Board Terms & Acronyms vantillian 11/05/10 10:02:16 PM
#188   Roger. mercurialmike 11/05/10 09:26:27 PM
#187   mercurialmike and I are gonna be putting a vantillian 11/05/10 09:24:58 PM