Penny stocks

Question: Thank you for your insightful financial advice on Marketplace. I enjoy your commentaries.

I had WM in an individual stock portfolio. Embarrassed – yes…
I was wondering if it would be better to: A. Sell all that stock and take the tax savings this year?, or B. Hang on to the new WAMUQ penny shares and hope that they will eventually make it back to around $12.00 a share? I’m thinking answer A because I don’t anticipate those shares reaching those levels again for a long, long, long time. What’s your two cents? Eric

Answer: Look at it this way: you have plenty of company owning Washington Mutual. You can also tell people that you owned one of the worst investments of 2008.

But then again, I don’t understand the lure of penny stocks. I can’t figure out why anyone would playing the penny stock market, especially in the case of a company like WaMu since there isn’t any real remaining stock market value to it. There are plenty of good blue chip stocks to invest in. The value of WaMu is now with its new owner–JPMorgan Chase–that took over the company in a deal engineered by the Fderal Despoit Insurance Corp.

So, as far as I am concerned, I see the real value of the these shares for you is taking it as a tax loss.