Gold penny stock investments are some of the best investments, along with rare earth metals, available to the average, everyday investor. Few people can ordinarily tap investments that can turn $1,000 into $10,000 and it not be that big of a deal. Gold stocks, particularly those of the smaller, exploration variety, can routinely generate three and four-digit returns due to the nature of the mining industry. The junior resource companies, as they are called, focus their efforts on searching for the next world class mineral deposit. When they find it, cash-rich producers can buy these sites at a premium and richly reward early investors. So, I want to share some of my best mining share market tips. Gold Penny Stock Investments Benefit From Great Leverage Gold penny stock companies, as noted above, have built-in leverage. The leverage is what allows a 10-cent company to go to one dollar and hand the holder a 1,000% return. The leverage is, in part, a function of the segregated mining industry, where explorers bank all on sniffing out huge mineral deposits. While a great number of companies can tank in this process, the winners sell out at a premium. While 1,000% returns are nothing to sneeze at, 10,000% returns are possible. Even 85,000% returns have happened. Leverage can also arise from the market conditions, as well as the business model. The stocks are inherently volatile, which will be discussed next. But volatility can be not only extreme, but also irrational. The small market cap of these companies and low number of outstanding shares means that even a modest degree of buying or selling pressure can get the bid-ask spread moving happily. At times, there is even market ignorance to boot. For instance, Iâve seen rare earth companies sell off mercilessly in response to nuclear crises. The only problem is, rare earths have nothing at all to do with nuclear power or uranium. But only modestly-educated investors are acting out of fear and really have nearly no knowledge about the âflavor-of-the-dayâ stocks they own. Nonetheless, this inefficiency in the market creates great buying opportunities. Buying opportunities come in other forms as well. These tiny $10-50 million companies do not warrant the attention of money managers. Off the radar from analysts and watchful eyes, itâs not uncommon to find some of these companies selling for less than true value of the company. Iâve even purchased companies for less than their cash on the books. This opportunity will persists. Large money managers simply cannot even take a large enough position in these companies. Even if they did, exiting would be difficult. Moreover, many funds even prohibit investing in these companies. Thus, you can always sleuth these companies for great deals. Then wait.