Wednesday, October 05, 2005
Tracking Spam Stock
On May 5th, 2005 (05/05/05 spooky!) I set out to determine just how much money I could lose by trusting SPAM.
What if I purchased 1000 shares of stock from EVERY stock tip mentioned in a SPAM email? Could we all really be missing out on a great opportunity?
Of course, I don't have the money to actually waste on an experiment like this. I made this little web site to keep track of the value of those stocks … without my actually purchasing anything.
I did a bit of stock trading back during the Internet Boom (and made enough to get a car and take it easy for a while, more due to timing than skill) so it's pretty easy to see the scam here (and yes, I get these stock spams too). A scammer buys a penny stock (a large volume of penny stock), hawks it like there's no tomorrow (because, really, there isn't) and sells it as soon as it upticks a few cents.
One thing to note: I thought that I would realize temporary windfalls on all penny stocks, but then see big losses. Instead almost ALL of those stocks I added went up a few cents max, then dropped like flies the next day. So much for short term gains.
One thing to consider—these are cheap! Picking one from his
HTSC.PK. Purchase price was 19¢ per share. Even if
it goes up 3¢, for 20,000 shares ($3,800) that's still $600 profit, and
two such trades per week isn't that bad a take (and the Spam Stock Tracker
“bought” it at 19¢—the spammer probably got it for a cent or two
An interesting strategy might be to “buy” the stock early in the morning, then “sell” just before the markets close the same day, and see how well one does.