by Franklin J. Parker
A few years ago, I transferred-in an account for a client. As I looked through the positions to prepare recommendations about which positions to sell and which to keep, I noticed a handful of penny stocks. Actually, to call them penny stocks would be an exaggeration. They were each worth fractions of a penny and, of course, only traded over-the-counter.
I assumed that these were positions-gone-bad—stocks that had fallen far from grace, trophies to amateur overconfidence. I called my client to discuss removing them.
“…Oh, and one more thing. I’ll send you a form to remove these stocks from your account since they don’t trade and aren’t worth anything.”
“What?! No, don’t do that!” was his urgent reply.
Franklin J. Parker, CFA 