There are some quite emotional posts on the risk of investing in...

There are some quite emotional posts on the risk of investing in pharmaceutical shares like STI. Well, yes, they are risky, but if they come off we hope for big returns – that's the adrenalin rush that gets me going on these shares.

I have a an approach for getting my adrenalin fix on speculative shares. If you interested, here it is.

I heard about a fellow who made a lot of money by buying spec stocks during the 1933 depression. Yes, some companies went under, but he was more than adequately compensated by those that succeeded because in many cases the success was spectacular. I'm trying a similar approach. I have a portfolio of 37 stocks which includes 7 of what I call my 1933 stocks. The criteria I use for them to be classified as 1933 stocks are
1)They cost me no more than 5c per share
2)I did not spend more than $5,000 on each stock
Of the 7 1933 stocks, 4 are up and 3 are down. Not a great record, but the monetary value is up by 220%. This is way above the average gain of about 50% for the rest of my portfolio. I first identified the shares by monitoring those with a value of less that 5c per share that made the biggest gains in a day, and put these on my watch list. If they showed to have a reasonable liquidity (ie easy to trade) and I liked what I saw from research, I waited for the price to retract from the rush that caused them to go up, and then bought.

STI is one of the 3 that is down (marginally). I confess that emotion has also drawn me to these shares. I was born in Africa and know what HIV is doing to peoples' lives there. I just hope that their drug trials on HIV/TB patients work. I am not suggesting for one moment that this sort of emotion should drive investment decisions. This is a case where I have allowed emotion to drive the purchase of a stock – as I say I don't recommenced this.

My approach outlined above is not a recommendation (it does carry risk) – the intent is to encourage others to share their own approaches.