Hard Mailer Pump and Dump Performance Part 10

Ian Cassel Blog, Pump and Dump 11 Comments

Pump and dumps have been going on since the beginning of the stock market and are most prevalent amongst penny stocks.  The hard mailer is one of the most used avenues to pump a stock. The company themselves, affiliates, or large shareholders pay millions of dollars to mail out glossy 20 page reports trying to dupe investors into buying the underlying stock so they can sell their positions or conduct a financing. Just like gravity, when a hard mailer pushes a stock up, the buying eventually ends and they always crash back down to Earth.

It has been several months since I’ve updated my Pump and Dump Performance matrix. Since we are so close to Christmas, just be thankful that Santa didn’t give you this bag of coal 🙂

Here is a performance matrix of every hard mailer I’ve received at my home over the past few years. As you will see, time is a pump and dumps worst enemy. Over time, most of the companies that are mentioned in hard mailers lose most of their value. Some even go to zero.

PumpAndDumpPerformance

Many hard mailers look like this one below, which I received on December 17th on Falconridge Oil Technologies (FROT). You will see the cover page and the compensation disclaimer.

It’s unfortunate that in many cases an investors first entre into the microcap space is from unscrupulous sources such as a hard mailer or some pump and dump website. It’s important for investors to know that only a small percentage of microcaps indulge in such unethical tactics. Many microcaps have great businesses, management teams, share structures, and conduct themselves with integrity.

At MicroCapClub, many of our members make a living exclusively investing in microcap stocks. If you want to find out how we do what we do, check out some of our educational articles and Join Us.

MicroCapClub is an exclusive forum for experienced microcap investors focused on microcap companies (sub $300m market cap) trading on United States and Canadian markets. MicroCapClub was created to be a platform for experienced microcap investors to share and discuss stock ideas. MicroCapClub’s mission is to foster the highest quality microcap investor Community, produce Educational content for investors, and promote better Leadership in the microcap arena. If you are a passionate microcap investor, Join Us.

Comments 11

  1. Very good analytical data. Also look at the correlation between the amount paid for the promotion and the dollar volume in that stock. Then deduct any double sided trades, also remove excess and you will see the money trail. The SEC has been doing a great job, but there are too many promoters with too many stocks being pushed for volume. Back to the basics, stick to revenue producing companies and asset based companies, no hype news companies in my folio…

    1. Post
      Author
  2. Ian,

    This report is absurd. I have made approximately $1.7 billion in the last twelve years buying companies I have learned about through mailers.

    Please refrain from posting any more on this issue.

    CL

    1. Post
      Author
    1. Post
      Author
    1. Post
      Author
        1. Post
          Author

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.