Dwight points to a story about the latest spam craze and asks the obvious question: "Who are the idiots that buy stocks touted to them in spammed email?"
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.
The study recently published on the Social Science Research Network say their conclusions prove the hypothesis that spammers "buy low and spam high".
Actually, I've made money off some of the pump-and-dumpers. It's a treacherous game, admittedly, but that's where the thrill comes in -- successfully dumping before the pumpers dump. It is highly speculative but not as dangerous as, say, options -- as long as the speculator understands the dynamic exactly.
Posted by: Dale on August 28, 2006 12:49 PMNot everyone is as informed as we are I guess. I got the Bill-Gates-is-going-to-pay-you-to -forward-this-email email last week. You'd think everyone would know that is a hoax. Guess not.
Posted by: Katie on August 31, 2006 9:36 AM