Recession or no recession, there are some stocks that are bound to perform well in the stock market, irrespective of whether their sector is doing well or not. You may wonder how this is possible. Well up to now you have been made to believe by the erstwhile media of all the people, that the present and future worth of a company is decided by the performance of that particular sector.    It is the same as it is for individuals. Assume that you graduate from a well known college in your field. When you come out in the job market, then if your college is reputed, and you have done well in your exams, then you are bound to get a good job with a good company, which will give a boost to your already good career prospects. However, inspite of doing well in your exams, if you are from an inferior college, then you are supposed to prove yourself in your job and the industry. Similar is the case with  the act of buy penny stocks. The blue chip stocks can be compared to graduates from well known colleges who already are in great demand, and the penny stocks of not so well known companies, can be compared to good quality graduates from not so well known colleges. They inherently have the ability to do well, but they do not have a good reputation as they are not from a reputed college. Likewise, the penny stocks will also have to prove themselves in the market in the short term.  This is a very unlikely analogy that I am drawing. But the fact of the matter is that this is a fact in the market. Just as a good graduate will do well in any situation, a good buy penny stock will do well in any circumstances whether in recession or growth phase.  But the question remains as to how to pick the best penny stocks in a market full of penny stocks of all varieties. How to pick the right stock which would be likely to gain in the short run of say six months or one and half years.  The one key rule is to pick stocks that are quotation at below $5.00 now but which are likely to gain exponentially in the near future.  You may well ask how to pick such stocks. To this I would answer that picking the right and best penny stocks is a science and it cannot be done based on anyone’s intuition.  There should be a valid reason for picking a certain stock of a company to trade in.  Apart from this golden rule, there are certain key ratios which can be calculated in order to gauge the inherent strength of the company stock.  One can ascertain whether the penny stock of the company is quoting at the right price or is quoting below its inherent value, or is much overpriced. There can be a variety of permutations and combinations.