The aggressive investor – our Stock Advice

Article Excerpt

The world is full of conflicts of interest, especially when it comes to stock advice, so investors need a healthy sense of skepticism. That’s especially so with junior companies, because they sometimes pay for their stock to be recommended in an investment publication. A stock promoter may pay all or a large part of the cost of sending an investment publication to hundreds of thousands of rented names. In return, the investment publication refers to the promoter’s stock by name, and describes it in glowing terms that look like stock advice. The fine print in the mailing or investment newsletter will tell you how much the promoter paid, if the payment was all cash, or if it included free stock or stock options. Disclosed payments sometimes run as high as $800,000. This is perfectly legal, so long as the materials disclose the payments. Before buying a stock that appears in an investment newsletter — or buying a subscription to any investment newsletter —…