The Great Penny Stock Chaser Experiment
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While listening to my satellite XM/Sirius radio (Howard Stern — shhh!) I always hear advertisements for a website called Penny Stock Chaser. They claim to pick penny stocks that increase in value anywhere from 50% to 2000%. Having bought a few stocks in the past, I do know that the risks associated with penny stocks are pretty high and you could lose a lot of money – if you invested a lot of money.
Since I am always looking for ways to make money online and create extra income, I signed up on Penny Stock Chaser’s website and I have been receiving their stock picks for a few weeks now. Some of their picks literally go up 40% in one day, while a few days later that very same pick might drop 50%. I have a theory about Penny Stock Chaser which I am about to test.
My theory is that when a new stock is hyped up on Penny Stock Chaser, it immediately skyrockets due to all of it’s members investing in that stock. Then, once it has turned a profit – everyone who is smart, cashes out at a higher stock value and the stock then crashes. Some people call this a “pump and dump” scheme. I plan to try and use this scheme to try and profit from Penny Stock Chaser. This is what I will call “The Great Penny Stock Chaser Experiment“.
I am going to start with a measly $150. (I put $158 in my Scottrade account – the $8 will cover the first stock purchase. My rules are as follows: 1. I can only purchase stocks that Penny Stock Chaser picks. 2. I cannot hold one stock for more than seven days. I am going to try and focus on new stocks that Penny Stock Chaser begins to hype up. I have been getting their emails for a while now, so I won’t try and pursue stocks picks they have been sending out for a while now. One thing to note; I can sell a stock and buy a new one, but then I have to wait three days for the funds to clear- Scottrade has a three day waiting period in between purchasing any stock under $4. So, let the experiment begin!
I will be buying my first penny stock within the next few days. Once I have purchased my stock, I will keep you updated with screenshots of my Scottrade account. I will be providing screen shots of my account throughout this entire experiment – whether my account grows or dwindles, you will see the results. At this point I am not a proponent of Penny Stock Chaser, nor am I denouncing them – I will have a stronger opinion after this experiment!
You can visit Penny Stock Chaser’s website here: Penny Stock Chaser
Let us know what you think about this review of Penny Stock Chaser, if you have compliments, complaints, comments or you think it is a scam – let us know by commenting below…
Best regards,
Michael-John Wolfe
TAGS: Residual Income, Make Money Online, Royalties
THE GREAT PENNY STOCK CHASER EXPERIMENT – RESULTS
Date: February 3, 2010 – BUY 37,500 shares of GDHI.PK @ .004 per share =$150.00
Date: February 10, 2010 – SOLD 37,500 shares of GDHI.PK @ .0035 per share = $123.58
Date: February 10, 2010 – BUY 124 shares of MYSL.PK @ .98 per share = $129.13
Date: February 17, 2010 – SOLD 123 shares of MYSL.PK @ .82 per share = $94.16
Date: February 17, 2010 – BUY 2800 shares of WDRP.PK @ .0227 per share = $70.88
UPDATE: So far EVERY stock that Penny Stock Chaser has reccommended to me via email has gone down as soon as I bought it. In fact, my initial investment of $150 is now down to $70.88. I am going to stop trading and hold this final stock as long as possible. So far I am not impressed with my results!
8 Comments to “The Great Penny Stock Chaser Experiment”
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I am a huge fan of Howard Stern and am very skeptical of penny stock chaser. I have never invested in stock and can’t wait to see your results.
Yes – Howard is the man, I like to hear his commentary when Robin reads the news. Growing up in Connecticut, I remember hearing him on the radio in the old days. I am itching to sell out of this first stock – GDHI, it seems that PSC has stopped “pumping” the stock up, so I may take a small loss and sell out of it. They are pumping a new stock today that I will look into for tomorrow. I too, am skeptical!
MJ
Wow, good thing you only decided to invest a little bit in PSC. Like everything else in life, if it sounds too good to be true, it probably is. Howard is still the man though.
Yeah – I’m glad I did not go in with $500 or anything. I literally bought each stock the day after I got the email from PSC “hyping” it up. So my plan to buy and sell when it went up did not even work – they all went straight down! Howard is just doing his job – reading cpy for an paying advertiser.
MJ
I found this experiment when looking for reviews of PSC as I was skeptical also, but I’m even more skeptical of you. I believe, due to the advertising and other reviews that PSC is doing a pump & dump scheme.
You left out an extremely important factor that could significantly affect the results of your experiment — what time of day did these stock alerts get sent out? Was it before market opens? This is extremely important because you say that you purchased these stocks the day AFTER PSC sent you an email about them. If you check out the prices for each of the stocks in your experiment on the day BEFORE you bought them (meaning the day PSC sent the alerts out), the stocks go UP.
So if the stock alerts are sent out early in the day, then you’re retarded for waiting until after the pumping is done to buy, no wonder they go down… that’s the dump part. To win at pump & dump you need to buy before or during the pumping, not wait until it’s done.
GDHI 2/2 Open: 0.0032 High: 0.0040 (+25.0%) Close: 0.0040 (+25.0%)
MYSL 2/9 Open: 1.01 High: 1.06 (+4.95%) Close: 1.05 (+3.96%)
WDRP 2/16 Open: 0.0230 High: 0.0270 (+17.4%) Close: 0.0263 (+14.3%)
So basically what I’m saying is that this is a bullshit experiment. Sure your numbers are accurate, but your experiment leaves out important details (when the stock alerts were sent) and why you decided to wait instead of buying immediately when you received them. If this is a pump & dump scheme, then you MUST purchase the moment they start pumping, not a day after.
Anyway your experiment convinced me to sign up for PSC, but unlike you I’m going to watch the stocks and keep track of the prices at the time the alerts get sent out and where they go after that before I actually put money on it.
Well I am no pro at trading stocks – but I would usually get an email from PSC regarding a stock and buy the next morning. I did not always buy at the opening bell, but I bought within a reasonable amount of time. Can you post some of your trades in the comments below? Let us know when you actually purchase these stocks and then post your gains/losses when you sell? I would love to see how someone who knows how to work a “pump and dump” scheme actually does using PSC’s alerts. You don’t work for PSC do you?
Oh and by the way, I recieved TWO emails from PSC hyping WDRP.PK since the closing bell yesterday. This stock is still down this morning. So where’s the “pump”?? If PSC sends out two emails about one stock in one day – you would expect some sort of increase in the stock the following morning.
MJ
I signed up for PSC a few mins after I posted my earlier comment, so the only alert I’ve received so far is about a stock you already mentioned. Like you, I’m going to focus on alerts for stocks that are just being mentioned by them, not ones that keep getting mentioned by them for weeks. I do NOT intend to invest money based on their alerts anytime soon (I don’t trust them, which is why I was looking for reviews and found this site), but instead I’ll look up the price of their stock picks at the time the alerts are sent and see what happens over the next couple days-weeks to those stocks.
Stock prices fluctuate throughout the day, so the actual time that the alerts are sent out is important (and you neglected to tell us the times). All I did to get the numbers from my earlier post was take the little info you gave (that PSC gave out the alerts the day before you bought), and looked at the opening, closing, and highs of the day for those stocks. The numbers I listed are only a good measure of PSC’s predictions is if PSC gave the alerts before the opening bell (which is what a lot of stock alerting services do), but you didn’t say when they were sent (and I wasn’t signed up with them until today, so I can’t check for myself). For more accurate numbers, check the prices at the times the alerts were sent.
I don’t know for a fact that PSC is a pump & dump. They may be recommending companies they think are good buys, but since they’re recommending penny stocks (and the service is free), the nature of their business is going to cause stocks they recommend to have ‘unnatural’ jumps in price (similar to pump & dump systems). The number of shares of penny stocks traded in a day is typically significantly less than ‘normal’ stocks, so it takes significantly fewer buys to cause the price to rise. Even if they are just a pump & dump system, that doesn’t mean they can’t be used for profit.
Also, buying and holding a stock for a specific period of time is a sure way to lose money. You should really consider using limit orders, or more specifically trailing stops, but I that’s beyond the scope of this article (PSC, not a stock primer).
You need to start a blog about stocks or maybe about penny stocks! You obviously like to write and you are good at getting your point accross. I am going to hold this final stock WDRP, since I just read that they turned over 130 million shares to the treasury, lowering the overall amount of stock available. I have already cut my money in half, so I don’t have much to lose buy holding it. Plus, if I keep buying and selling more stocks the transaction fee alone will eliminate the rest of my money!
MJ