Speculative-growth stocks can inspire dreams of wealth - and nightmares of poverty.
These companies are often new ventures selling something people want, generating rapid revenue growth, but incurring high expenses as they strive to become a permanent fixture of the corporate landscape.
One might be the next Microsoft MSFT. Or the next Atari.
Their defining characteristics are rapid revenue growth but slower or spotty earnings growth - strong sales, in other words, but a lagging bottom line.
In fact, many speculative growth companies lose money - lots of it. That's not much inducement to invest.
Still, corporate America's future heavyweights and best investments may lurk in this high-risk, high-reward corner of the market.
It's possible to curb some of the risk, too.
For example, Yahoo YHOO, the World Wide Web portal was one of the hottest Internet stocks of the 1990s.
These companies are often new ventures selling something people want, generating rapid revenue growth, but incurring high expenses as they strive to become a permanent fixture of the corporate landscape.
One might be the next Microsoft MSFT. Or the next Atari.
Their defining characteristics are rapid revenue growth but slower or spotty earnings growth - strong sales, in other words, but a lagging bottom line.
In fact, many speculative growth companies lose money - lots of it. That's not much inducement to invest.
Still, corporate America's future heavyweights and best investments may lurk in this high-risk, high-reward corner of the market.
It's possible to curb some of the risk, too.
For example, Yahoo YHOO, the World Wide Web portal was one of the hottest Internet stocks of the 1990s.
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