Gee. Some people really are dumb enough to buy stocks on spam tips

[swag]

http://www.nytimes.com/2006/09/10/business/yourmoney/10stra.html

Stock Tips From Spam Aren’t Just Silly. They’re Costly. (Hulbert)

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 realized a sizable loss.

In an interview, Professor Frieder said she was initially skeptical that investors were actually following the advice in stock-touting junk e-mail. After all, few people ever say they welcome spam; most seem eager to zap it from their computers. But her skepticism faded after analyzing the data. “I am aware of no other plausible explanation for the patterns we found,” she said.

She said that the authors based their conclusions entirely on an analysis of aggregate data, not on a study of particular cases, so they had no proof that any individuals in particular were directing such schemes.

IN any event, Professor Zittrain said in an interview, the Securities and Exchange Commission has rarely tried to prevent stock-touting spam messages, many of which contain fine print disclosing that the spammer will be selling the very stock being recommended for purchase.

Of course, the most immediate lesson for investors is this: ignore unsolicited e-mail messages. But there is also a broader lesson, relevant even for those who ignore spam. It has do with the desire, even eagerness, to believe that there is a stock out there that could make a lot of money, and with how that desire affects people’s judgment. As Professor Zittrain put it, “greed all too easily colors our objectivity,” and it’s true for all types of investors.

[bridgit]

1. you mean that chinese penny oil company stock is bogus...

dammit!! that was going to buy me my grass shack in belize x(

[swag]

2. Check the bid.

Your window of opportunity may still be open.

[bridgit]

3. wee goody!!

belize here i come...maybe :bounce:

[petronius]

4. That is pretty shocking...

I find it inconceivable that a person could believe that an unsolicited e-mail with the headline "Intoxicated pony-ride wart lint" would contain a genuine stock tip. I find it even more inconceivable that such a person would have the ability to actually purchase a stock...

[swag]

5. It's mind-boggling, isn't it?

But the volume of that type of stupid spam just seems to be increasing.

Many people love to be taken for a ride, it seems.

[petronius]

6. I could make an attempt to politicize the trend by saying

that 5 years of Bush has made many people so desperate that they'll grasp at straws to pay the bills, but the truth is there are just an awful lot of ignirant and gullible people out there - and their numbers are increasing...

[speedoo]

7. Unfortunately, that's just the tip of the iceberg.

The mistakes people make in dealing with investments is truly mind-boggling in scope. And I'm talking about normal people when I say that, not just uneducated people or people of below-average intelligence.

There is a field dedicated to the study of the mistakes people make... it goes by several names, but "Behavioral Finance" is the one that is used most often.

Much of the money that is made by successful investors is the direct result of mistakes made by people on the "other side" of a buy or sell transaction. That is an unfortunate fact of life.

[Heidi]

8. Perhaps it's more closely related to desperation than stupidity.

The desperate need to feed one's family and plan for the future, in the absence of decent wages, health insurance and a pension plan, often will drive otherwise intelligent people to do desperate things. :shrug:

[elperromagico]

9. No way! LTTL is going places!!!

The e-mail told me so and anything I see on a screen must be true!

[Heidi]

10. Mutual of Omaha's Wild Kingdom

has jobs for people with your unique qualifications. :rofl:

[elperromagico]

11. I refuse to talk to someone who dares to compare

the mustachioed Marlin Perkins to the non-moustachioed Jorge Arbusto. The comparison is not apt! NOT APT, I tell you!!!

[Heidi]

12. Jorge Arbusto.

:rofl: :spray: :rofl: