Highly skilled scalp-traders may be able to cash out of these "picks" fast enough to make bank, before the bottom (almost inevitably) falls out.
This is your average pump & dump. Be sure to read their disclaimers... and take heed accordingly.
This "prophet" gets paid to make his predictions, by the companies whose stock he is pushing. I'll let you make your own conclusions about the value of these "picks"...
Penny Stock Prophet (James Connelly) REVIEW - Here's the Cold Hard Truth...
The headline grabs you instantly as the site loads up... "Secrets to Turning $1,000 into $1 Million by Investing in Penny Stocks!".
What follows is this mystery-trader's story, about cracking a "secret system" to picking penny stocks that drastically jump in value, over and over again - so that after just 38 trades (apparently), any old schmuck with $1000 to "invest" can become a millionaire.
Below the seemingly-obligatory picture of Mr. Connelly standing beside his exotic supercar, you'll even find a giant chart, showcasing how, by using a conservative estimate of taking just 20% profits on each trade (using the Stock Prophet's secret formula, of course), you really can become a millionaire in just 38 trades, starting with an initial trading capital of just $1,000.
There are even a few somewhat-convincing videos, testimonials and alleged trading results further down the site's main page.
And to the uninformed, curious or otherwise blindsided investor - it's all very compelling. I can see how a lot of people (myself included) want this to be true. Because it seems viable enough (I mean, penny stocks are very volatile), and surely there must be people out there making a fortune from them...
In fact, even as I skim the website, I can sense my submliminal mind churning over the following thoughts: What if it's the real deal? What if this really is the "holy grail" of my financial future? What if the joke's on me, and my natural incilination as a skeptic is actually costing me millions in "lost" profits?
All of a sudden I come back to my senses, and I ask myself the "big" question. And perhaps the single-most obvious question of all...
If this is really true - why on earth would this guy sell his "turn $1,000 into $1 Million" system for a measly $97?
Obviously, there's got to be more to the story. In fact - there's a lot more. Because where this "Prophet" makes his real money isn't from charging $97 to access his magical penny stock investing system. That may account for some revenue, but it's definitely not the motherload.
So, what's the real play here? What's this guy really up to? If you're not already familiar with shady world of Penny Stocks... be prepared for a shock to the system...
The Penny Stock Prophet could very well be a millionaire - but I'm inclined to believe that it ain't just from trading penny stocks. It's from promoting and then unloading them.
And the sad part is that, amazingly, this is all 100% legal. Let me explain...
You see, penny stocks really are a legitimate type of investment. All a "penny stock" refers to is a startup company whose shares are priced at less than $1.00 (or $5.00, depending on who you ask). But instead of being traded on the larger and far more liquid exchanges like the NYX, NASDAQ, TSX and so on - penny stocks are traded on largely unregulated exchanges. Primarily, the main marketplaces are the PinkSheets (PK) and the Over-The-Counter bulletin board (OTCBB).
And it's true that penny stocks can - and do - commonly see massive gains (or losses), in very short periods of time. Sometimes stocks can double or triple in value in a day or less. But it works both ways - they can also halve, or reduce to basically nothing. This is simply because when a stock is priced at, say, $0.30, if the price adjusts to $0.60, the equity value has effectively doubled. Even though the stock only rose 30 cents. With a "real" stock (say, valued at $10), this type of movement would essentially mean nothing.
The bottom-line is that penny stocks are extremely volatile. Not only that, but due to the grossly-unregulated environment and general low-barrier to becoming a "public company" on the Pinksheets or the OTC, not every company or stock is what it seems. And, as you can probably guess - scams (fake or fraudulent companies) are not uncommon.
This volatility is exactly what makes penny stocks simultaneously appealing for experienced traders with a high risk-tolerance and proverbial "play money", while at the same time making it almost suicidal for novices (and just plain absurd for anyone averse to financial risk, or those with no capital they can afford to lose).
Now, most of the companies listed on the "Penny Stock" indexes are legit, or at least somewhat legitimate. And all of them have a common goal - to raise more capital, perhaps enough even to graduate to the big-leagues, and become a "real" stock, on a traditional exchange (like the NASDAQ, for example). Which would, of course, open the the proverbial floodgates of investment capital. We're talking access to millions upon millions of dollars.
And this, folks - is why stock promotion is a mega-bucks industry. These companies are desperate to bring in more investors, and in general see some "action", because the stakes are huge. Hence, many of these companies will gladly pay thousands of dollars just to be mentioned in any sizeable newsletter. Sometimes tens, or even hundreds of thousands - depending on the exposure level.
And that's where "The Prophet" comes in. You see - this guy's business model doesn't depend on picking "winning" stocks. He could care less. He gets paid regardless, every time he sends out an email to the members. In fact, here's a snippet taken directly from the PennyStockProphet.com Disclaimer page:
"On occasion PSP receives compensation from a third party in relation to the profiled companies in the newsletters and e-mail alerts sent to our members."
Now, here's the really nasty part:
Not only are these "stock picks" really just a cleverly-disguised paid promotion - these guys are actually buying up tons of shares BEFORE they promote them, waiting for the stock to artificially inflate (from the promotion), and then they're cashing out immediately after the stock spikes up - getting out before it inevitably plummets...
Meanwhile the hopeful followers watch the stock surge for at most a day - and then down, down, DOWN it goes!
No, really. That's how this works. It's called a "Pump & Dump". As in, pump up a stock, and then dump all the shares on your member's heads... at their loss.
Don't believe me? This is also quoted directly from the PennyStockProphet.com Disclaimer page:
"PSP, its affiliates, associates, relatives and anyone associated with PSP in any manner reserves the right to either BUY or SELL shares in the profiled company's stock, either BEFORE the date of the profile, DURING the date of the profile or at ANY time after the date of the profile. We may have an inherent conflict of interest by sending the newsletter at the same time we may own stock in the same company or even have been paid compensation at the time of the promotion."
This may not technically be illegal, but in my books it's as dirty as it gets. And not only that, but they're also adding insult to injury by charging $97 for the priveledge of receiving promotions.
All I can say is... Wow.
Translation, and clarification for people skimming this review: PSP is just another Promoter. Approach with Caution.
However, I think there's a better option...
To see what I do recommend, click the button to the right:
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The official PSP legal disclaimer and legally required disclosure.
User reviews of PSP at Investimonials
A rather harsh warning about PSP from an industry competitor.
Reviewer has not owned or tested this product, all information contained in this review is based of research the feedback of others that may or may not have owned the product.
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