Saturday, December 08, 2012

Penny stock ready to soar?

Really?  If a penny stock is ready to soar, why tell anybody else?  Just keep buying as much as you can afford.

You have probably seen these ads dozens or hundreds of times.  I think the thinking behind these ads is of one of two types.

First, the advertisers have bought lots of the unnamed stock and want you to buy some so the price will go up.  When the price goes up and seems to plateau, they sell out at a huge profit.

Second, and more likely, the advertisers want you to buy a "special report".  Once you do, you are on their mailing list and they will try to sell you more reports or their newsletter.  The newsletters may have dubious advice, more so if the writers have a political stance.  They will probably never own many shares of the stocks they promote, if any.