I have been getting this question asked of me quite a bit in the recent weeks. “How can you spot a stock scam and what are Red Flags when investing?”
The answer is, there is no clear and cut way to spot a scam. Obviously the better the scam, the harder to spot. Below is a list of things to look for in stock scams. The list is in no particular order and are more or less just red/yellow flags to me that may signal a scam or just that I should keep a very close eye on trading. Just having one or two red/yellow flags is a small sign of caution to me. More than five and I stay away from it, although I still might “trade” it if Momo is there.
-The company makes many promises but never delivers. Examples: Dividends, To Move Exchanges, The Stock Reaching a Particular Lofted Price
-Late Filings
-Heavy Dilution
-Heavy Pumping and Cheerleading
-Blaming Low Stock Price On Shorted Stock.
-Checkered Past by Company Executives
-New Stocks That See Quick Price Jumps and Declines
-Company Executives Pumping There Own Stock
-Failure to Meet SEC Rules and Regulations
-Questionable O/S and Float
-Inaccurate SEC Filings
-Broker Restriction on Buying and Selling
-Heavily Spammed Stocks
-Constant Company Delay’s
-No Record of Revenues or Profit for Companies that Have Traded for More Than 6 Months
-Promises of Financial Salvation
-Company Focused on Stock Price and Not The Business
-Halted Trading
-It Seems To Good To Be True
- Huge Dilution
- PR's on a daily basis
- Gagged Transfer Agents
- Being told to "Not Worry about Current Price of Stock"
- The Stock has a History of Reverse Splits on a Yearly Basis
- Unable to Contact the Company at all
- Pinksheet Holding Companies with no assests of there own!
These are just a few that investors should be aware of that several members and myself have put together. As I think of more, or more are brought to my attention by others, I will add them to the list.
Also, another great read by Guapo, a very repsected HSM Member and an excellent trader with tons of knowledge when it comes to the penny market.
http://www.hotstockmarket.com/forums...=36435&page=12
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The answer is, there is no clear and cut way to spot a scam. Obviously the better the scam, the harder to spot. Below is a list of things to look for in stock scams. The list is in no particular order and are more or less just red/yellow flags to me that may signal a scam or just that I should keep a very close eye on trading. Just having one or two red/yellow flags is a small sign of caution to me. More than five and I stay away from it, although I still might “trade” it if Momo is there.
-The company makes many promises but never delivers. Examples: Dividends, To Move Exchanges, The Stock Reaching a Particular Lofted Price
-Late Filings
-Heavy Dilution
-Heavy Pumping and Cheerleading
-Blaming Low Stock Price On Shorted Stock.
-Checkered Past by Company Executives
-New Stocks That See Quick Price Jumps and Declines
-Company Executives Pumping There Own Stock
-Failure to Meet SEC Rules and Regulations
-Questionable O/S and Float
-Inaccurate SEC Filings
-Broker Restriction on Buying and Selling
-Heavily Spammed Stocks
-Constant Company Delay’s
-No Record of Revenues or Profit for Companies that Have Traded for More Than 6 Months
-Promises of Financial Salvation
-Company Focused on Stock Price and Not The Business
-Halted Trading
-It Seems To Good To Be True
- Huge Dilution
- PR's on a daily basis
- Gagged Transfer Agents
- Being told to "Not Worry about Current Price of Stock"
- The Stock has a History of Reverse Splits on a Yearly Basis
- Unable to Contact the Company at all
- Pinksheet Holding Companies with no assests of there own!
These are just a few that investors should be aware of that several members and myself have put together. As I think of more, or more are brought to my attention by others, I will add them to the list.
Also, another great read by Guapo, a very repsected HSM Member and an excellent trader with tons of knowledge when it comes to the penny market.
http://www.hotstockmarket.com/forums...=36435&page=12
.
