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 Posted: Sun, 22nd Mar 2009 09:10 Post subject: Penny Stocks |
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Anyone have any experience with these? I have a bunch of penny stock recommendations sitting in my spam mail inbox that are obvious pump and dump schemes. But what happens if you buy the stock low (as soon as the spam mail is sent out) and sell it right away a couple of hours later when it doubles? (effectively piggybanking the pump & dump scam without doing anything illegal). Is there any way to get burned by this besides dishonest brokers? (or if you don't sell at the right time).
Thoughts? Comments? Experiences? Tell me to fuck off?
Peace.
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| Posted: Sun, 22nd Mar 2009 11:47 Post subject: |
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spankie
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Posts: 2958
Location: Belgium
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helvete
Posts: 2727
Location: Sweden
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| Posted: Sun, 22nd Mar 2009 17:43 Post subject: |
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They'd have to prove intent first though, right? If you say "I thought it looked like a good deal but then a friend told me it was a scam so I sold" then how could they fine you?
REPOST
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| Posted: Sun, 22nd Mar 2009 18:32 Post subject: |
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| Quote: |
your profits can be reversed and you can get a fine by the SEC or the local authorities... |
How? I didn't do any of the false promoting. I simply bought and sold as I saw fit.
Sense Amid Madness, Wit Amidst Folly
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| Posted: Sun, 22nd Mar 2009 18:33 Post subject: |
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| JeanPerrier wrote: | | who says it doubles? |
It double, triples, quadruples... but only temporarily. Same thing with the downswing: the stock can halve in half a minute.
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Esel_Gesi
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Posts: 3802
Location: Chicago
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| Posted: Mon, 23rd Mar 2009 02:28 Post subject: |
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a couple buddies lost some serious scratch messing around with really cheap stock. I'm no expert but i like to live by these 2 rules: "if it sounds too good to be true it probably is" and "educate yourself on something before you throw money at it."
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Frant
King's Bounty
Posts: 24685
Location: Your Mom
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| Posted: Mon, 23rd Mar 2009 04:10 Post subject: |
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| Quote: | | "educate yourself on something before you throw money at it." |
That is so true it almost hurts. And it doesn't cover only stocks and money schemes, it covers most things you spend your money on.
Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn!
"The sky was the color of a TV tuned to a dead station" - Neuromancer
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Frant
King's Bounty
Posts: 24685
Location: Your Mom
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| Posted: Mon, 23rd Mar 2009 08:03 Post subject: |
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I will, soon as I find a decent brokerage.
Sense Amid Madness, Wit Amidst Folly
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spankie
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Location: Belgium
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| Posted: Tue, 24th Mar 2009 02:24 Post subject: |
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| tainted4ever wrote: | | Quote: |
your profits can be reversed and you can get a fine by the SEC or the local authorities... |
How? I didn't do any of the false promoting. I simply bought and sold as I saw fit. |
You seriously think pump and dump schemes are legal? Go to the SEC website and look it up. Of course your transactions will be reversed, and so are these of the scammers. But because it is not possible to check whether you actually are a scammer, you are reversed as well. You will get no punishment (if you are ignorant...) but it will be reversed.
I remember some months ago that the stock price of yahoo i guess jumped from 20 or 30 to 0.01 because someone missed on an order. Everybody started buying @ 0.01 because stop-loss orders were executed. Those were reversed as well. Wouldnt be that hard to nake money if that was possible.
Just sell 1 share @ -20% to yourself 10 times in a row and all the stop-loss tranasctions will trigger. Buy all those stop-lossed back and then sell 1 20% above market price to yourself and sell your 10000 shares to the resistance based triggered orders...
Boy boy, i know some bankers are gangsters, but it is not THAT easy to make money.
And btw:
a share of 0.1 can go to 0.0 and you are broke.
A share bought @ 0.1, goes up to 1 and then there is no demand, what you gonna do? Sell it to aliens?
Those pump and dump schemes are mostly, not always, OTC pinks, which means you probably cannot buy them online and their is probably not a liquid market for it. In those emails, they mostly recommend OTC pink slip brokers. Should i make a drawing, or do you understand the kind of brokers that are?
And those companies that get used in pump and dunp schemes, i know some biotechs that went really low that were the victim, they file complains. And your assets will be frozen. Will you be happy with that?
I do not understand why you would take that risk. If it is too good to be true, it is...
Why not take a legal risk to make some money?
Buy some long term calls on a company like GM or ford if you think they will tank, buy some cocoa future call options, i dunno.
Want a good safe bet with a high upside potential and low downside? You need some brains and some calculations, but do this.
Open an account on E*Trade financial and do the following:
Buy some GM obligations, Short GM or Short obligations and buy GM calls: depending on what you guess is more probable, GM dead or alive. Then do the math and depending on the risk you want to take, hedge by defining your ratio between obligations and puts/calls/shares. Thats the way to do it, no pump and dump.
Need some others? What about shorting $/Yen or $/euro? You can hedge with gold bars (or go naked and leave the hedge away if you are really stupid...)
Need more complex? invest in rent spreads. Fed paper and interbank is soaring again, but now the new US measurs. What will happen? Guess and be lucky...
If you want to make a lot of money, there are ways. But high return and no risk? Only AIG, Bear Sterns, Goldman Sachs, Merril Lynch, Bank Of America... believed that, and look where it brought us. 
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| Posted: Tue, 24th Mar 2009 08:21 Post subject: |
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All times are GMT + 1 Hour |
But the SEC does not reverse pumps and dumps on pink slips; there are just too many of them. If I went ahead with it I probably could participate in a pump and dump without it getting it reversed. Problem is before the P & D the stock is dominated by one shady broker... have to do the buys with them over the phone, and then they wont sell when you tell them, or they jack up markups, or whatever etc... you're right, the entire thing is a waste of time because it is a minefield of scams.
Til then I guess I'll stick to peddling weight loss tea to Canadians as an alternate source on income.
