Penny stocks. There is no official definition of penny stocks in India but these are typically stocks with very low prices. As per Economic Times, these stocks have piqued investor interest. Why? Because 200 of them have seen their prices appreciate by up to 1000%. And that too in the short period since 2012. The reason for this sudden run up - the promoters and small market operators are trying to lure investors into these stocks. There has been absolutely no change in fundamentals of these stocks during this period. To a layman such a run up may present an attractive opportunity. Naturally expecting the price to go up even further he would be willing to put his money into the stock. But when prices are 'jacked' up by promoters and operators, further run ups are not always the case. Eventually when the euphoria fades, rationality is bound to return and then, stock markets have to value companies based on what they are truly worth. When this happens, all gains c an vanish as fast as they had appeared. Investors would be better off to stay away from such stocks. It is better not to get fascinated by rising prices. Instead concentrate on the fundamentals and intrinsic value of the stocks. That is the only way to create long term wealth.