Penny Stock Promotional Mailers

[Brendan Egan]

I personally used to love trading penny stocks--I haven't in a while but it is something I may start up again. Anyways, on to the point of this post: Anyone ever get an email from a penny stock promoter claiming stock XYZ is going to go up XXXX% in the next week? And that THEY KNOW the big money is ABOUT TO MAKE A MOVE?

Well, first off they don't know sh*t other than the fact that if they reach enough uneducated people with their letters they themselves will spark a little bit of demand for the crappy company they are promoting that only trades a few thousand shares a day. And then these poor uneducated people will be stuck in long positions in a stock that is collapsing and lose everything (seen it happen before).

Anyways I keep getting spam emails from these promoters, today I got a few dozen from various promoters, and I think it is extremely important to 1) avoid the stocks that you get in an email tip (which I talk more about in this blog post) unless you actually are trained and educated in taking the opposite position of what they are promoting and 2) read the disclaimer of shady financial sites.

Here is part of the disclaimer of one of the mailings I received today:

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We have been compensated two hundred thousand free trading shares of FRDM by third party to profile for ninety days. We have been compentated four hundred thousand free trading shares of HDUP by third party to profile for ninety days. We have been compentated thirty thousand USD dollars by third party to profile ENTB for ninety days. We have been compentated sisxty thousand USD dollars by third party to profile tsni for ninety days

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And here's another:

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X received five thousand dollar from a third party for a one week advertising contract of MLMN

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And yes, the geniuses couldn't even spell the word "compensated" correctly in their disclaimer. Anyways I don't want to see any of my followers get sucked into any of these emails--which are growing in number lately. So if you think something is too good to be true, then chances are it really is too good to be true. Learn how to actually trade and how the market works, and then the money will follow. I actually know a few traders that trade against these types of mailers and do so extremely successfully.

Personally I think what they are doing should be illegal as it is very shady business and they are giving the rest of us a bad wrap, but they have their little disclaimer which apparently is enough to legally protect them. Bottom line: always read the fine print.