People have asked me about pink sheet stocks.
In my day I used to take a flier on a couple of pink sheet stocks or penny stocks just to think I could find the next Microsoft. I still haven't found it. I haven't tried in the past 10 years because it is like hitting the lottery.
Lessons learned in life. People do make money in penny stocks but they specialize in this and are the ones selling the stocks.
A little education on penny stocks and something new where the pink sheets will have some credibility.

A major concern with investing in stocks listed on the Pink Sheets is accidentally stumbling onto an illegitimate company that could instantaneously drop 50%, 75% or even 100%.

It happens all the time on this thinly regulated exchange. The Pinks are crawling with pump-and-dump penny stocks and even sub-penny shell companies that do nothing more than issue periodic press releases and more shares of worthless stock. There are always new investors to scam, and new press releases with new business plans to push. Crooked companies flock to this exchange, all too eager to fleece unsuspecting investors of their hard-earned money.

And then there’s the scarcity of information available to investors on many of these companies. You see, the Pink Sheets is not an exchange like the NASDAQ or AMEX -- it’s only a quotation service. The only requirement a company faces on the Pinks is that it must have at least one market maker quoting its stock. Financials do not need to be disclosed. Even on the OTCBB, companies are required to keep current filings with the Securities and Exchange Commission.

These hurdles can make the information gathering process for Pink Sheet investors very frustrating. But there is a very small group of stocks on the Pink Sheets that every small-cap investor should know about. If you’re looking to invest in Pink Sheet securities instead of making quick trades on momentum, this is the place you should look.

It’s a new premium listing service on the Pinks called OTCQX. The new listing service includes three different levels, each with specific requirements for the companies.

The top tier is called PremierQX. These are securities that trade for a minimum of $1 and meet all of the requirements to be listed on a national stock exchange. This means the companies are required to post quarterly and annual reports, and also interim information that could affect share prices.

PrimeQX stocks must also meet the requirements to be listed on a major exchange. However, the stocks listed in this group do not have to trade for the $1 minimum. International OTCQX stocks must meet requirements of their foreign exchange and make their reports available in English.

All three groups require the companies to maintain ongoing operations (this helps keep those pesky shell companies out of the picture). Together, these three lists make up the safest investments on the Pinks. It’s a great place to start looking if you’ve never invested in these types of companies before.
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As of today, there are only seven companies listed on the OTCQX: Computer Services, Inc. (OTCQX: CSVI), Meritage Hospitality Group, Inc. (OTCQX: MHGU), Moro Corporation (OTCQX: MRCR), Day Software Holding A.G. (OTCQX: DYIHY), Globex Mining Enterprises, Inc. (OTCQX: GLBXF), Wal-Mart de Mexico S.A.B. (OTCQX: WMMVY) and Starpharma Holdings Ltd. (OTCQX: SPHRY).

And the list is practically brand new (it commenced trading on March 5). But more stocks should be added to these groups in the very near future. In fact, the people at Pink Sheets are currently processing applications filed by 20 more companies. The quotation service will probably announce additions to the OTCQX lists soon. This could be great exposure for some small, legit firms. And it could also be a great opportunity for savvy penny investors to score shares.