What’s Jeff Brown teasing in his “Timed Stocks Summit?”

What's the "February 9 at 4:30am" stock teased in ads for Early Stage Trader?

By Travis Johnson, Stock Gumshoe, January 23, 2020

Jeff Brown’s “Timed Stocks” pitch is essentially just another spiel about “buying biotech stocks before a catalyst event,” but it’s wrapped up in one of those video “summit” meetings that implies it’s something beyond a newsletter ad… and it’s so filled with massive promises of potential 1,000%+ gains that it’s driving a lot of Gumshoe reader interest.

They even hired a woman with an English accent to introduce the “presentation,” along with some strange techno music… kind of reminds me of the 1980s, when everyone on Wall Street listened to horrific music and hired secretaries and receptionists with aristocratic-sounding English accents to make them seem like they were hoity-toity upper class folks.

But anyway, what can I tell you about the presentation? It’s an ad for Jeff Brown’s Early Stage Trader, which they say is “devoted to delivering fast returns from small tech stocks”, and it’s “on sale” — they’re peddling it for $1,997 for years with several guarantees (“list price” is $4,000 a year).

Those guarantees are that the average pick will at least double, and that one pick will rise by 1,000% or more… so what’s the meat? What if those guarantees aren’t fulfilled? In that case, you get a third year for free.

Which is fairly typical, most publishers offer a guarantee similar to that for their higher-cost letters — they won’t give you your money back, but they will give you something else that doesn’t cost them anything instead. That’s a riskless guarantee for them, of course, since adding another subscriber to an electronic newsletter costs roughly $0… and extending your subscription if you’re unhappy enough to demand that they fulfill their guarantee is also unlikely to cost them anything, since your other option was likely to cancel your subscription. And, of course, after that free year I’m sure they’ll have their autorenew in there to catch your renewal payment for year four (they don’t say what the eventual renewal price will be, other than to note that it may be more or less than your initial subscription price).

And I sat through the whole “presentation,” so never doubt that I love you… and I pulled out some tidbits along the way.

Much of the “presentation” is about the general idea of “Timed Stocks” and the certainty with which Brown claims he can identify the winners in that category with 100% success… but what caught the eye of most Gumshoe readers, of course, was the idea that there’s one of these coming up soon, with “Jeff’s #1 Timed Stock” set to hit zero on its “timer” on February 9.

And we all know that newsletter teaser ads require a deadline — if they just say, “we’ll identify 12 stocks with great potential over the next year,” you’ll probably yawn and move on… but if they say “we’ve got a secret stock that could rise by 1,000% or more in two or three weeks, hurry and type in your credit card numbers before the deadline,” well, suddenly the response rate for that ad surges higher. We all crave immediate certainty and fast gains, because, well, we’re not very smart only human.

The first half of the presentation is all about this mystical notion of “timed stocks” — Jeff Brown says he has identified more than 100 “timed stocks” that have posted massive gains, with 100% winners… though, of course, I’ll remind you that finding past winners is just a data mining exercise that requires only that you tweak your criteria until everything comes up roses, it’s pretty easy (it’s finding future ones that’s hard).

“Timed Stocks” are just stocks that, thanks to the federal government, have a preset timer attached to their share price — when the timer ticks down, the stock surges as it gets to zero. Whatever could that mean?

We get a bunch of examples… here are a few, in case you’re interested:

Emisphere (EMIS) presented a “timed stock” opportunity on February 22, 2018. Went from a few pennies to $2+, then later to almost $10.

Amarin (AMRN) had a December 15, 2011 “timed stock” moment Monday, september 21 at 8am — a 314% gain in three days, which he says is on the “lower end” of “timed stock” gains.

And we’re told that one of the biggest “timed stocks” in history was Alterity (ATHE), a nanocap valued at under $10 million… and Brown says that…

“They didn’t know this was a “timed stock” that was set Monday, July 29, at 8am. Had we gotten in ahead of time, our reward could have been 23,200% in one day.”

Note that he says “could have been” — which almost certainly means “wasn’t”… when investors make gains like that, they talk about it.

And I was curious about that one, actually, since I think it was the hugest winner he mentioned, so I went to check it out — it turns out that this is almost entirely a made-up bit of foofaraw, created by somebody mining past “big winner” stock charts without actually looking at the company or the numbers.

Alterity Therapeutics is an Australian biotech, it is indeed very tiny (market cap is still around US$10 million, and on average it trades less than about A$8,000 worth worth of shares in any given day). There’s also a Nasdaq listing at ATHE for an ADR, and, perhaps more importantly for our purposes, there’s a legacy OTC listing at ticker PRNAF that essentially never trades.

But when they released their Phase 1 clinical trial results for their drug (so yes, there was really a “timed stock” catalyst), the shares of the OTC symbol PRNAF did indeed rise by 23,000% in one day. But that’s just because of the trick of charting software insisting on a starting point that isn’t zero, the stock actually went from trading no shares and quoting a $0.00 share price on the days leading up to July 29, to trading 700 shares for 2.3 cents each on July 29. Which charts show as a 23,000% gain, even though the stock had been at a similar level just a few weeks previously, when it last traded.

The catch? That was a single trade in a symbol that essentially never trades, and it was for — get this — a total of 700 shares. Which means that someone, somewhere, completed a trade using this mostly defunct OTC ticker for a total of $16.10. That’s where the 23,000% gain chart comes from.

Now, to be fair, the real company in its real home market did respond positively as well — on the Australian exchange, Alterity briefly spiked from about three cents a share to four cents a share on the 29th, on the strength of 1.6 million shares trading in the wake of the Phase 1 trial results (so yes, that’s a total of about $50,000 worth of trading in the stock that day), though it was back down below three cents quite quickly a day or two later. There was a real catalyst response to the clinical trial results, but it wasn’t even 100% let alone 23,000%… and if you blinked, you missed it.

There are a bunch of others that he cites in the ad, should you wish to go check them… hopefully they’re more “real”…

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Clovis on January 2, at 4:05pm on Wednesday afternoon, got a $1.6 billion windfall, shares shot up 524%, from the $30-40 range. So that must be a reference to 2017.

Matinas had its “Timer” event on February 8 at 7:05am, went from a microcap at about a dollar to $7 or so, thanks to a $190 million windfall.

Amicus had a timer that was supposed to hit zero on April 29 at 8am, so if you bought before that around $10, it went down to $5 and then rose 721% when the “timer” hit zero.

I didn’t look at all of them, and there were at least a dozen more… and sorry, digging into each example is not really the point here — the point is that we should always question those kinds of ludicrous past returns that are cited… not only are they usually the result of data mining and backtesting, not historical stock pick ideas from the particular service being advertised (remember, you can make a backtest say ANYTHING about the success of your strategy, since of course you tinker with the criteria until your results are great, the whole point is to look for things that worked in the past), but sometimes they’re also just hooey. Certainly we should not imbue them with any predictive power, or let them ignite our daydreams.

So we’re moving on… and yes, that “timed stocks” notion is clearly a reference to FDA calendars and guidelines. They even cite the “federal government rules” that tell us that these stocks have this predictable timing…

Brown says that Title 21, Part 312 of CFR is the government document that each stock filed before their shares spiked up. And yes, 21 CFR 312 is, of course, the section of the Code of Federal Regulations that covers the rules for Investigational New Drug Applications to the FDA. Most of that is not specifically timed, though there are some guidelines for review times and transparency of the review timeline that primarily came about as a result of PDUFA and