When you see, as you put it, "people running around dumping stock for no apparent reason", I would suggest you buy some of it.

Warren Buffet, though using big bucks and not on penny stocks, still uses that very same strategy and holds his bargain shares for long term gains. It works. A lot of people dabbling in penny stocks don't know one way or the other whether or not a company is something special, nor do most of them care. They just chase after quick peanuts and flip shares whenever there appears to be an opportunity to make some more beer money.