the cheapest heavily traded stock ... ?

Is that really the way to choose a stock? I say it absolutely is. But how do I justify that?

The idea is that, to maximize their opportunities in the stock market, everyone should invest a small amount of money in what would be regarded as extremely speculative positions.

There are many professionals who are certified and prepared to advise you about what to do if you have a lot of money to invest. Safety is always of paramount importance. If you invest a large amount of money, you want to protect yourself from losing a large portion of it. An insured savings account is truly a legitimate thing to consider, in such a case.

What's a large amount of money? It might be money you are saving to buy a nice house for cash. Maybe it's a million dollars. It might be money for your kids to go to college ... a million dollars ... lol.

The advice I'm recording in these posts is not about that kind of investing. That's money you are saving, for a purpose. Investing and saving are really two different things.

Investing is really and truly about placing bets. If you do it in an informed way, you can profit. And it's not an illegitimate thing to do, just because it's gambling. Your willingness to take a chance, to roll the dice on a good thing, makes you a provider of capital, which is the foundation of production, which is the foundation of prosperity.

It's true there are conservative investments which might have a place in a savings plan, but keep this in mind: even conservative investments at times, and not so infrequently, lose people lots of money. Conservative investments, like all investments, need to be selected and timed effectively. Do you know how to select and time an investments?

One way to learn would be to study speculative investments. If you can learn to select and time them effectively, you will also learn to select and time all investments effectively. Is there a reason that speculative investing is a better study tool? Yes. It's more useful to you.

Here's an approach you could take: until you know what you're doing, keep most of your savings - 90%, say, or even 99% - in a savings account. Then use the additional small amount to invest in very speculative stocks.

Why choose very speculative stocks? Because they have the highest potential return ... by orders of magnitude. You could make much, much more money, in a few years, from the $500 or $1000 or maybe $10,000 you might place in speculative positions - this is the total amount you want to place in all speculative positions, 10% or less of your savings - than you will make in many years from more conservative investments.

For emphasis, let me repeat that, in slightly different terms. It's my personal opinion that a complete savings and investment plan inherently includes a program of small highly speculative investments. That gives you the chance to maximize your returns, a thing which cannot be achieved by any other means!

But, is buying the cheapest actively traded stock really the way to do this speculative investing? Here's my sense of things: you will often find that the cheapest actively traded stock is a truly interesting company trading at an extreme bargain price.

What is a truly interesting company? It's one that may become a substantial player in a substantial market, and remain a substantial player for many years. Your investment of as little as a few dollars - let's say 10 dollars - could become holdings of thousands of dollars worth of dividend paying shares. I'm not kidding!