The Pumpers and Promoters

By Travis Johnson, Stock Gumshoe, September 4, 2009

In this Friday File space I cover a variety of things — from my favorite personal stock holdings, to regular ‘ol teaser unravelings, to investigations of worthwhile investment themes.

Today I’m straying a little bit away from that … there is one thing that really sticks in my craw that I haven’t written about for a very long time: Stock promoters masquerading as stock pickers and/or legitimate newsletters.

And it seems like some of these folks have recently been emboldened by the recovering markets to redouble their efforts to pull the wool over our eyes, and many of you have been asking me about some of these clowns, so I thought I’d have a quick look at them and try to shed some light on a few of their techniques.

The one that more of my readers have sent me than any other is from a group that used to call itself the NY Times Report … it appears that the lawyers for the New York Times must have finally found someone to sue, because since late May they’ve been calling themselves NY Stock Report. But their business appears to be pretty much the same.

NY Stock Report is one of the many free email subscriptions that claim to be able to send you hot info and tips for short term trading in penny stocks, and, like many of them, they reserve the right to trade around these stocks as they’re promoting them, and they take money from the companies they’re promoting and from third-party firms that are also motivated to make the stock go up (or back down).

I’ve been getting emails from this group since April, and I’ve only noticed them promoting two stocks: Magnum D’Or Resources (MDOR) and Caddo International (CADD).

How do they build interest in these companies? They use repetition, varying investment theses, and purported outside interest to bolster their claims.

Repetition? I got emails from NYTimesReport about MDOR every three or four days for much of the Spring and Summer, each giving a different variation of their shouted reasons why MDOR was about to boom — the company, in case it matters, appears to be working on rubber recycling technologies, and they own some huge tire landfills.

There was even a series of emails about upcoming Wall Street Interest — they said they expected a “Wall ...

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