How to Lose Money Investing in Stocks

Everybody has advice for you on how to make money investing in stocks. There’s always that hot stock tip you hear about that promises you’ll make a fortune in the next Microsoft. But how come nobody ever tells you how to lose money in stocks? What if we could tell you a sure-fire way to lose a good chunk of your hard-earned capital? Well, that way would appear to be investing in your money in over-the-counter (OTC) stocks. In fact, if you had invested equal amounts in every one of the 16 OTC stocks we covered in 2013/2014 at the time we first wrote about them, you’d have already lost -44% of your hard-earned money. Let’s take a look at the returns for each of these OTC stocks we warned investors about. We’re going to exclude of course any stock that is trading on a foreign exchange and uses the OTC market as a vehicle for U.S. based investors to buy their shares. Here we go.

 OTC Company Article Today  Return
Sigma Labs (SGLB) Jul-13 0.068 0.072 +5.9%
Champions Oncology (CSBR) Aug-13 1.14 0.5 -56.1%
Solarwindow Technologies (WNDW) Sep-13 1.92 2.01 +4.7%
Quantum Materials Corp (QTMM) Sep-13 0.07 0.195 +178.6%
Nano Labs Corp (CTLE) Sep-13 0.045 0.0052 -88.4%
Liquidmetal (LQMT) Oct-13 0.14 0.136 -2.9%
American Graphite Technologies (AGIN) Nov-13 0.194 0.0117 -94.0%
Makism 3D Corp (MDDD) Nov-13 Suspended -100.0%
Tauriga Sciences (TAUG) Dec-13 0.015 0.0033 -78.0%
Industrial Nanotech (INTK) Dec-13 0.018 0.0079 -56.1%
Rainbow Coral Corp (RBCC) Jan-14 21.5 0.715 -96.7%
Bio Matrix Scientific Group (BMSN) Mar-14 0.006 0.0005 -91.7%
Nanoantibiotics (NNAB) May-14 0.29 0.25 -13.8%
3D Pioneer Systems (DPSM) May-14 0.39 0.0221 -94.3%
Regen BioPharma (RGBP) Sep-14 0.38 0.15 -60.5%
Manhattan Scientifics (MHTX) Nov-14 0.1185 0.0485 -59.1%

Only 3 of these 16 stocks are in positive territory; SGLB, WNDW, and QTMM. Sigma Labs (SGLB) was the first OTC company we highlighted. Since our first article, shares are up +6% after a very volatile ride. Here is our collection of articles on SGLB. We’re not holding our breath on their eventual success. Solarwindow Technologies (WNDW) used to be called New Energy Technologies (NENE). The stock is up +4.7% now that they have changed their name and revamped their corporate image. Again, our articles on WNDW show that nothing merits anything but a highly speculative investment so far. The exception of the group, Quantum Materials Corp (QTMM), is up +178% which is quite a surprise given we haven’t been impressed with their string of broken promise over the years. The Company has shipped 40 samples now to potential customers and yet still no revenues have begun trickling in. QTMM had just $19,439 in cash on hand as of March 2015. Having diluted their shareholders by over 40% in fiscal 2014, they will no doubt have to continue issuing shares to stay alive. Any sign of revenues may merit another look.

If we take out the outlier QTMM, you would have lost -59% of your capital in an equally weighted portfolio of the other 15 OTC stocks involved in “disruptive technologies”. And in a bull market as well! So much for the benefits of diversification. Investing in a simple S&P Index Fund from July 2013 to present would have returned +29% with much, much lower risk. There’s a reason that brokerage firms we use such as Motif Investing don’t allow investors to buy OTC stocks. Going forward, we’ll continue to write about OTC stocks that appear to be involved in disruptive technology in an attempt to steer investors clear from cash burning ventures that lead nowhere and direct them towards legitimate companies involved in disruptive technologies that will generate real shareholder value.

Any OTC stocks you’d like us to look at? Any bad/good experiences with the above 16 OTC stocks? Want to accuse us of being a part of some short conspiracy? Drop us a line in the comments below!

If you're only investing in stocks and bonds, you're missing out on a whole spectrum of alternative asset classes, from commercial real estate to fine wines. Here's a list of 90 vetted fintech companies offering alternative asset classes for accredited and non-accredited investors. Click here to get started.

Fintech doesn’t have to be boring

Get our unique take on all things tech once a week.