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whiteheron
05-09-2006, 09:13 PM
I get quite a bit of unsolicited investment advice from places unknown
Those sending this stuff no doubt get my email address from some source, but I am not aware how or where they get it as I only disclose my address to very few others that I know that I can trust

All unsolicited investment advice received is deleted without any action whatsoever being taken, however, just to confirm my action conclusively I saved a few of the emails from the last month or two and have now reviewed them
Yes, just as I thought, in every case but one the price is now very significantly below what it was when promoted

Additionally, the last few days I have been getting a variety of offers of things like viagra, sex etc
These too are deleted immediately

I guess that these things are the price that one pays for a wonderful facility like the internet, but they wont be getting my hard earned money

trackers
05-09-2006, 09:51 PM
There was a post a while back mentioning a website that tracks all the sp's of spam recommended stock...The overall portfolio was down an incredible amount

peat
06-09-2006, 01:41 PM
its called pump and dump and yet its not always about viagra


http://news.bbc.co.uk/2/hi/technology/5284618.stm

Spam messages that tout stocks and shares can have real effects on the markets, a study suggests.

E-mails typically promote penny shares in the hope of convincing people to buy into a company to
raise its price.

People who respond to the "pump and dump" scam can lose 8% of their investment in two days.

Conversely, the spammers who buy low-priced stock before sending the e-mails, typically see a
return of between 4.9% and 6% when they sell.

777
12-09-2006, 02:00 PM
From stuff.co.nz today

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Share spam sucks investors in
12 September 2006

By MARK HULBERT
Sydney Morning Herald

Many investors apparently trust spam email. At least, those messages that say a fortune is to be made in a speculative stock. All too often, credulous people buy the shares, only to see them plummet in value.

That is the conclusion of a study by Laura Frieder, an assistant professor of finance at Purdue University, and Jonathan Zittrain, professor of internet governance and regulation at Oxford.

The professors focused on spam that urges the immediate purchase of a company's stock. Such unsolicited email is cheap to send, the professors noted, and not just because of the low cost of obtaining email address lists. In recent years, they said, relationships between spammers and virus authors had caused millions of virus-infected personal computers to be harnessed as zombies to send spam, further lowering its cost.

As a result, one person can send the same junk email message to thousands, if not millions, of addresses in a short time. Based on industry data, the professors estimate that as many as 100 million stock-touting junk messages are sent in an average week, accounting for as much as 10 per cent of all internet email.

In most cases, the stocks promoted in the messages did not trade on major exchanges, and tended to be illiquid and in the off-market over the counter arena known as the Pink Sheets. Typically, investment advisers or Wall Street research departments did not usually follow the stocks. Their illiquidity, and the absence of regular scrutiny, made the stocks relatively easy to manipulate, the professors said.

The researchers combed through 26,000 junk messages that Professor Zittrain received in his email box from January 2004 to July last year to compile a database of stock-touting spam. They also surveyed 1.8 million messages received during that time by the internet newsgroup called Nanas, which alerts administrators of email networks to spam outbreaks.

About 300 stocks were recommended in the messages, each of which contained a time-stamp indicating when it was sent. Because not all the messages hyping a particular stock were delivered at the same time, or on the same day, the professors focused on the day the greatest number of messages were received. On that day, they found the stock was 13 times more likely to be the most actively traded Pink Sheet issue than it was on days when they had no evidence that junk email was sent urging its purchase.

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The increased liquidity created by this higher volume is crucial to the success of the spammers' pump-and-dump strategy, according to the professors. If not for that greater liquidity, the spammers would find that their sell orders would depress prices so much that they would realise little if any profit.

Sure enough, the professors found a distinct price pattern in the touted stocks. It pointed unambiguously to spammers buying stock before the days when they sent their messages and selling as those messages were received.

On average, a touted stock gained 4.6 per cent more than comparable issues on the trading day just before the spam's peak volume day. On the peak volume day, when the professors believe that the spammers sell the bulk of their shares, the stocks price stayed more or less even. But one trading day later, the return was 5.9 per cent lower than that of comparable issues.

The professors concluded that unscrupulous traders were able to turn a tidy profit by buying shares before sending their spam and then selling as investors started acting on the spam's advice. In contrast, investors who bought shares realised a sizeable loss.

Mark Hulbert is editor of The Hulbert Financial Digest, a service of MarketWatch.

bambi
12-09-2006, 10:54 PM
I'm not sure why people aren't using the advice of the spam. Why not just short the stocks. I mean if it's been shown that on average they drop in price within a short period of time then it's pretty easy money.

There isn't much point complaining about it, best to use it to your advantage.

mothership
07-11-2006, 02:51 PM
I seem to be getting more and more spam mail offering me fabulous stock tips, and loads of viagra. To be honest, if I was paying any attention to them I suspect I would be having a lot more sex, rather than investing in the shares suggested. As it is, I just wish xtra's spam filter would get rid of them

Snapper
08-11-2006, 12:31 PM
quote:Originally posted by bambi

I'm not sure why people aren't using the advice of the spam. Why not just short the stocks. I mean if it's been shown that on average they drop in price within a short period of time then it's pretty easy money.

There isn't much point complaining about it, best to use it to your advantage.


As pointed out in the Hulbert report, though, most of the stocks are illiquid and don't trade on the main board - what sort of mechanism would there be to short them?