Investing Scams

1. PUMP & DUMP – Hot Stocks & Penny Stocks Newsletter Scams

There are a number of businesses out there that peddle free “Hot Stocks Newsletters” or “Penny Stock Newsletters”.

While in theory there is nothing wrong with this as a service, quite a number of these publications operate under a clear conflict of interest.

There are still companies promising 100%+ returns from buying the stocks they recommend. However, if you visit any of these sites and navigate to the disclaimer you will find an important piece of text that explains their business model.

Hot Stocks & Penny Stocks Newsletter Scams

  1. “Company A” wants to boost its share price.
  2. It speaks to a purveyor of HOT STOCKS NEWSLETTERS, preferably one with a huge email contact list.
  3. “Company A” may agree to give the Newsletter publishers payment in the form of “Company A’s” stock, for the service of convincing it’s clients to buy those stocks.
  4. The Newsletter publishers receive these stocks, then they recommend buying “Company A” in their newsletter.
  5. As the people receiving the email start to buy the stock, the stock naturally rises.
  6. As the stock rises the Newsletter Publisher and perhaps even people inside “Company A” can then sell the stocks to realize a profit. This is called selling into strength.
  7. The person receiving the email see the stock rise temporarily and then fall. Of course, they cannot complain because they will be advised they should have sold sooner and that they should read the disclaimer.

2. Overpriced Stock Trading Courses Scam

Have you ever been to a free 3-hour stock investing training course in your local area, where energetic smartly dressed traders blow your mind with how to read a stock chart and use indicators to get rich?

It is usually 1 hour of how charts are amazing and 2 hours of selling “Sign up for our stock trading course for $4,000”. 

But that is just the beginning, once you are in there will be endless upsells, $6,000 Options Trading Courses and $8,000 get-away weekend seminars.  I have had members write to me who have spent $20,000+ on courses and still not made any money.

Check if the trainers are even certified analysts.  It is amazing how many people throw their money away listening to advice from people who do not even have an industry certification.

3. “Follow Me” Guru Scams

Have you ever had the video you are watching or the website you are reading abducted by a shameless video of some guy, living a super cool life?  He appears driving his Lamborghini on his way to his yacht for a party he is throwing for all his great friends. On his yacht, he takes the time to explain to you, what a great life he has and how happy you will be because his life can be your life… if you sign up for the intensive trading room or proprietary trading desk (prop desk) training.

Anyone who is stuffing down your throat what a lavish and wonderful life you can have if you follow them is the cheapest and dirtiest trick in the book.