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« Ryan on EzineArticles.com | Main | Are You Jaded? »

December 07, 2006

Comments

Griffin

Great advice!

Perry Droast

Ryan,

I've been receiving "Scott Fraser's" magalogs for a few years. This is the legal (I think) version of a pump and dump. These types of ads are paid for by a group of investors that own large amounts of very inexpensive penny stocks. Usually under a buck or two, sometimes only a few pennies. Because they are illiquid, only a few buyers push the stock up quite a bit. Then they sell chunks of stock all the way up and part of the way down. Then when it's all said and done they buy it all back when the price falls back to pennies again. He's not the only one doing it. In fact John Myers is doing it too. He was a legit investing newsletter writer/analyst writing for Agora Publishing. He hit rock bottom in my eyes when he started doing this.

This brings up a good point. Would you write one of these ads if you had the chance? I bet it pays real well. It might be hard to turn down but ethically I would have a tough time writing an ad like this.

Ryan Healy

You ask a good question, Perry. I've turned down work before; I would turn down this kind of letter as well. It just doesn't add any kind of value to the person who winds up buying the stock.

I suppose you could argue that a person who buys a "pump and dump" stock will get to "ride the wave" as well.

But someone who falls for this is not going to be sophisticated enough to have any kind of money management rules, much less actually follow them. (Stop losses, trailing stops, taking profits at certain levels, etc.)

What's more, I wouldn't want my reputation to be synonomous with "pump and dump." Know what I mean?

Bill Murphy

Good job in exposing a scam artist:

http://www.sec.gov/litigation/admin/34-48544.htm

Scott P. DeMenter

To steal from ol' Mark Twain, the difference between direct mail and junk mail is the difference between lightning and the lightning bug.

Juel Edwards

I was looking for "Scott Fraser" 's address when I found this blog. I bought True North Energy on his recommendation and it has gone down ever since, now down 90% from my entry. Can't something be done about such people? I am also down on Accuray by 48% recommended by another shyster, insider selling is rampant.

Ryan Healy

Juel - Unfortunately, not much can be done. Chalk it up to a lesson learned and move on. Teach others so they don't make the same mistake.

tower defense

I suppose you could argue that a person who buys a "pump and dump" stock will get to "ride the wave" as well.

produse curatenie

What's up, after reading this amazing post i am as well delighted to share my know-how here with mates.

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