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Today, more and more newsletters are used to promote small companies,
mainly microcap companies trading on the pinks or the OTCBB.
While some
of these newsletters try to offer qualitative picks, most of them
simply try to sell overvalued shares to ignorant investors, and get
compensated for this in shares. Almost always, the persons creating the
promotion
use the artificially increased demand to dump their shares. Often, there is a restricted
supply in the beginning of the hype, to pump up the share price before selling in the hype. In both cases, as demand decreases, a fall is unavoidable.
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Stockworld.com is subscribed to many newsletters and is very successful in determining when a stock gets overhyped.
As an ex players in
the promotional field, I can perfectly see when a stock is getting
over-promoted, resulting in a great short trade opportunity for members. These trades have a much higher success rate than long trades since it is much easier to spot the over-hyped companies, than to spot the
unknown winner among thousands of stocks.
If you are subscribed, you will receive short trade alerts when a company gets drastically overhyped. All you have to do then is trade, wait a few days, and cash in.
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