The recession of last year had virtually wiped out many companies and had dealt a body blow to the real estate industry in the USA. So adverse was the reaction by Native Americans to the recession, that a majority of them left their homes and loved ones to escape the numerous creditors that were breathing down their necks. It is only now that reports have come in that USA may increase salaries in the second half of 2010. This in effect indicates that it is coming out of the recession. But for traders who had a lot of exposure to the NASDAQ, it was a bloodbath. All their investments were in penny stocks and when the NASDAQ, fell it took with it all their hopes and plans of leading a good life in future. Suddenly, things became bleak, and people did not know where to go for respite. Some of them also thought it right to embrace death.  But the question to be asked is why did this bloodbath occur? It happened because human beings have the tendency to follow the herd. Don’t understand what I am saying? Well, I am saying that if one individual makes money by buying a particular stock, then there are a hundred others who will follow him in the act in order to make money. That means, they do not have their individual goals, but are merely following in the footsteps of other people who have made money performing those actions. Following in the footsteps of successful people may prove to be beneficial in life, but when it comes to stocks, there is no standard solution that can be given. Every individual has to be treated on a case by case basis. This is because people buy penny stocks with various goals in mind. Some of them plan to keep those stocks for a long time and then when the time is ripe, they intend to sell it off and retire to a comfortable life. Some others have planned their children’s marriage with that money. Still some others have plans to take a home from the money that they make in the penny stocks.  There are various other goals that an individual may have when buying the purported best penny stocks.  But the moot question to be asked is whether really those stocks which they have bought are the best penny stocks available.  Not many know the answer to this question. This is because people have the herd mentality and do things because some other people have done it and become successful. They do not realize the simple fact that every penny stock has its own inherent value at which it can be bought.  If one is able to calculate this inherent value then one will never make a mistake in selecting the best penny stocks.  There are some ratios that have to be examined in order to select the fundamentally best penny stocks in the market.