Hello ErgoSum,
OK, the fact that ENRON may in the end be picked up at 10 or 5 cents on the dollar was not relevant in my critique on the Risk Theory that is used to imply that high profits depend on high risk. This erroneous theory gets a lot of inexperienced investors in high risk stocks without knowing the real facts behind the companies in which they buy shares.
Investing in penny stocks can be very profitable, but that means that some of these stocks have potential and buying those that blink out because they are going to make it is not at all risky. Among the penny stock buyers are gamblers that buy worthless stock and there are smart cookies that recognise a good deal if they find one....Note that I say find instead of see!
I do not agree that stocks by nature are risky. Many stocks represent sound enterprises that are by nature not risky at all. Then there are also stocks that are fundamentally very risky and are more like a roulette wheel. But that is a discussion that will not be proper for this Board, as it would diverge into a discussion on the Darwinian basics of why people survived as long as they have. Let's just say that investing is a game in which most players from the public domain have no information on the risks involved, and are hoodwinked with lies that are embodied in the Risk Pyramid.
Regards,
Conrad
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