Don't be a victim of the coming swine flu drop-off. Many people are going to lose money on recent penny stock investments which they made into companies that combat, prevent, or diagnose the illness.

At PennyStocks.com we looked into 10 penny stocks that stood to benefit from the current pandemic, and of those we only selected one for Peter Leeds Penny Stocks subscribers. The other nine have already enjoyed the majority of the gains they'll see, and now have more downside than upside.

In fact, the one we did select (and this is their direct quote) has "absolutely nothing to do with Swine Flu." The rise in share price they've seen is merely speculative investors looking to cash in on the pandemic, and gobbling up any penny stock related in any way to infectious diseases.

Our selection, Dynavax (DVAX), was chosen based on their strong fundamentals, proven management team, improving financial situation, and upcoming pipeline milestones. They also passed our demanding Leeds Analysis, which all Peter Leeds Penny Stocks selections must do in order to be profiled by us. The additional share price lift that DVAX has enjoyed from speculation into companies that battle infectious diseases is welcome, but not a reason to invest on it's own.

In other words, DVAX will do well with or without swine flu speculators. We can not say the same for the other nine companies we analyzed. (NVAX, GMED, SIGA, PURE, VICL, SVA, INSM, HGSI, HEB)

With the nine penny stocks mentioned above, here is their problem:

As swine flu spread, and became more widely known, speculative investors jumped all over these companies. This drove share prices up dramatically. Just look at NVAX for example, which spiked from 80 cents to $3.88 in two days.

Unless you get in on the first day and a half, and out pretty soon thereafter, you're exposed to dramatically over-paying. Case in point, take a look at the 60% tumble in NVAX shares over the week following the big rise.

An unfortunate truth about investors, mob mentality, and life cycles of buying stampedes is that most traders bought in near the top in price. Therefore, most lost money. A lot of it, and quickly.

I understand the reasoning that most of these people must of had. Swine flu was running rampant, and society is suddenly going to need the help of the products and services that these penny stock companies provide. Buy shares, and then your investment will increase in price while the company's sales ramp up. Very logical approach, indeed.

Unfortunately, if you buy something worth 25 cents, but you pay $3.00 for it, you had better hope for the biggest pandemic the world has ever seen. Otherwise, you're going to lose with your investment. Hopefully the fact that millions and millions of people didn't die from Swine Flu will provide some consolation.