More stock scam spam emails
Man, these things keep coming in. They keep wanting me to buy these penny stocks, assuring me that they are on the way up, and if I just buy them now, I will stand to make a lot of money. Of course, in reality, this is just a standard pump-and-dump scam. Buying these stocks would typically be a very bad idea — look at how much money this guy lost in his hypothetical spam stock portfolio — a loss of 86%!
I’ve gotten some more spam mails recently, so let’s take a look.
One thing that’s immediately apparent is that this image is nearly illegible. I could barely even make out the name of the stock they’re trying to inflate, CICG / CICG.PK. Maybe commercial spam filters are starting to recognize text in spam images and they’re needing to distort their text more to evade detection (kind of like a reverse CAPTCHA). Still, I don’t know anyone who would take investment advice from an image that looks so crummy. As for the stock itself, it barely has enough volume to even register on the trading charts, but it ain’t going up.
This second (also somewhat illegible) image is advertising the stock MISJ / MISJ.PK. Again, looking over the trading history from the past few days, I really don’t see any incentive to want to buy this thing. I wonder how many millions of spams this spammer (and I’m sure it’s just one guy) has to send out to get even one person to fall for it and buy a stupid scam stock.
Also, an update on PHYA / PHYA.PK, which I looked at awhile ago. The spam, as of the middle of December, declared:
Symbol: PHYA
Current Price: $1.90 (+18% Friday!)
Short-Term Projected Price: $4.25
Long-Term Target Price: $10.20
Of course, these outlandishly high numbers were simply made up. The stock has since fallen to about $1.66. It certainly never met the “short-term projected price” and it doesn’t look like it’ll meet the “long-term target price” either. Where does the spammer come up with these numbers anyway, a random number generator?
January 9th, 2007 at 13:14
I’ve occasionally thought that it might be fun to track spamevertised stocks, and maybe figure out the average time that elapses between when I get spammed, and when the spammers dump their stock. The idea being that it might be possible to buy stock early enough in the “pump” part of the scam, and try to sell it just before the “dump” part. Of course, to make any money, I’d have to buy enough shares to compensate for the broker’s purchase and sale commissions, which would probably be pretty hard, with penny stocks.
January 9th, 2007 at 13:52
Yeah, that is what I’ve been thinking, but I’ve investigated enough of these that I’ve found that it really is a losing proposition. Only one of them really made any appreciable money, and many of them dropped precipitously. The thing is, there’s no way to figure out which ones are sure losers and which ones could possibly be profitable. In other words, it’s a fool’s game. You can try all you want, but the game is so rigged the best option is just to never play.
As for brokers’ commissions, it’s not such a problem. My broker is a flat $7 per transaction, so it is totally independent of the stock price. I could buy one share of Google or 500,000 shares of penny stocks and I would still be charged the same commission.
January 18th, 2007 at 16:47
I also suffered the plague of penny stocks image spam, but I found a Spamassassin plugin that drives an OCR to detect spammy words in images and filter them accordingly. Here is my take about it : http://serendipity.ruwenzori.net/index.php/2006/12/19/fuzzyocr-hits-debian-unstable-and-eradicates-image-spam
January 18th, 2007 at 19:08
Hrmm, that is a nice idea. I don’t think I personally need it though, because (a) almost all of these things are caught by my spam filter anyway, and (b) they make good blog post fodder.
June 15th, 2007 at 12:27
I don’t think that this issue is just confined to the spammers, professional business magazines are also helping to promote some very shady companies. I ran the returns on what would have happened if you had just invested in 7 stocks (that I could get pricing on) and it turns out that you would have lost nearly 50%. Apparently, this is a big cottage industry for the business press.
http://davisfreeberg.com/2007/06/15/who-needs-spam-when-you-can-advertise/
July 17th, 2007 at 06:00
I keep getting these pump and dumps for Marshall Holdings - according to Google they are one of the most ‘popular’ stocks to be targeted.
I’d love to know how much the scammers make from these spam mailing campaigns that so get on our nerves - I’m sure there are a good few people who do invest without thinking.
November 10th, 2007 at 12:38
I’m trying to figure out how the spammers make any money out of this - assuming that the spammers are not the company itself.
Penny Stock Guide
February 5th, 2008 at 11:09
I’d like to start investing in either stocks, forex or futures but am relatively new to trading… can someone recommend which would be better to start with… or can someone recommend a site that can compare these markets and perhaps show pros and cons? Thank you
February 5th, 2008 at 23:10
Start with stocks. Futures are derivatives, so if you don’t even understand stocks, stay far away from them. Forex is another beast altogether, but I think pretty much everyone would recommend starting your investing with stocks and then gradually moving outwards as you become more comfortable with the markets. Skipping stocks and going straight to futures or forex would be like learning to swim by jumping into the deep end of the pool.
And I really hope I’m not responding to a spam comment. I couldn’t really tell.
February 13th, 2008 at 12:34
Thanks Cyde… I didn’t mean to have you question my post… those are the firms that were recommended to me… and stocks were my initial preference, thank you… would you recommend Scottrade? Thanks
February 13th, 2008 at 13:02
No problem, it’s just that usually when a post comes through linking to a bunch of sites, it’s spam. But your comment was actually coherent and relevant to this post, so I figured it wasn’t spam. Scottrade is what I use, and I would recommend it, with one niggling issue: their website has some compatibility issues with Mozilla Firefox. It’s the damnedest thing.
February 24th, 2008 at 21:46
John if you want to start with forex trading I recommend you a small first investment. It is a pretty volatile and risky business. You can have huge profits with forex, but huge losses too… so you have to be careful. (and if you found yourself making a trade just to recover a huge lose then STOP and take out your emotions from your trading system)
For forex brokers I can recommend you easyforex.com. I found a review of them at http://www.thereviews4u.com
Good Luck. And remember only invest money you can afford to lose.
March 10th, 2008 at 10:29
John, I would recommend working with Forex. You don’t need as much starting capital as Futures or Stocks, and you get amazing trading leverage. Forex is great because it trades very cleanly and very technically. You can work on your charting skills with Forex. Those sites you offered work great. If you are interested in working with Forex, I would suggest working with a top of the line platform. I used metatrader and have seen amazing trading success. Thanks, Bob.
March 10th, 2008 at 13:32
“Amazing trading leverage” is exactly what a beginning trader doesn’t need. That’s just setting them up to lose massive amounts of money with the smallest mistake. Remember, leverage is a two-edged sword. The losses as well as the benefits are increased.
March 10th, 2008 at 16:51
The phrase “trading leverage” sounds like a buzzword. Is it not just another word for “the amount you can invest at once”?
March 10th, 2008 at 19:54
Well, not quite. Leverage basically describes your risk exposure. For instance, let’s say you buy a normal stock. Your profit is measured as (current price)-(purchase price). So if the value of the stock doubles, you doubled your money. If the stock drops to nothing, you lose all your money.
Leverage allows you to increase your exposure to risk without putting in additional equity. For instance, with 2-1 leverage, if the stock only goes up 50% in price you’ve doubled your money, but at the same time, if it decreases to 50% of its value, you’ve lost all your money. If the stock becomes worthless, you lose an additional 100% of the original purchase price (so instead of just losing everything you put in, you lose twice the value of everything you put in). Leverage is a very risky tactic. It’s not part of any sane long-term investing for retirement plan. It’s exclusively the realm of speculators. Basically, think of it is gambling with other people’s money, except you’re responsible for paying the outcome, good or bad.