|A natural resource stock, purchased early in the discovery cycle, can rise quickly, providing returns that most investors would find astounding. They can go down just as quickly too!|
The main idea is to find a stock with a good story and a moderate number of shares outstanding, and take an early position, then see how the stock plays out. One basic premise is that is is much easier for a stock to go from 50 cents to $2.00 than to go from $5 to $20, even though the percentage gain is the same.
This is clearly a risky game that should only be played with capital you can truly afford to lose. Cut your losses and let your profits run.