Correlating Promoters Part II

Here is where we will gather the data and break down which promoters are most effective. I'll keep updating this post until I'm satisfied that we have a solid handle on which groups are important to keep track of.

02/16/2016

This week The Wolf and StockOfTheWeek pumped PVHO, getting an 18.3% rise out of it. They both also mentioned pumping PRKA last week so presumably both websites belong to the same entity. For the moment I'll let them each keep their own label in gmail but I'll consolidate them into one in the future.



The price action seems too choppy to buy and it's too cheap to short but the percentage move is decent so we won't dismiss them entirely as promoters. The PRKA chart looks horrible though so I won't even bother posting it.

Best American Stocks pumped CLOW which saw a 9.11% rise. It's actually interesting to see how long it took for any gains to materialize since I can see CLOW emails hit my inbox back on February 4th.



CLOW's chart looks much more interesting since it's actually at a level that would make shorting at least plausible. I'd want it to break through that high of around 63 cents and keep running before thinking about shorting but I'm still acclimating to the present-day promotion climate so I'm not sure if that's possible. Looking at the volume, it seems like the promoters were selling heavily into any attempts to breakout but we'll see. I'll keep my eye on it.

The Daily Stock Reporter which I've labeled EGM Firm Inc. based on their email disclaimers, has been pumping GOGY. One such disclaimer reports they have received $15,000 dollars compensation for the promotion though they apparently own zero shares. While GOGY did go up 29.05% (only a $0.009 increase), the chart is so ugly you wouldn't want to waste your time looking at it.

Beat Penny Stocks promoted SNDY. I had originally grouped Beat Penny Stocks with Penny Picks because they were sending identical emails but I can now see in one of their email disclaimers that their true entity name is Stellar Media Group, LLC so I'll change my labels for both of these newsletters to reflect that. According to the disclaimer, the group received $12,500 dollars to promote SNDY. We can also dismiss SNDY as a tradable ticker. The chart is too gross.

Farewell Awesome Penny Stocks

It is a day of mixed emotion for penny stock traders all over the world. A major player in the penny stock promotion game has announced it's retirement after recently attracting an unusual amount of attention from the Securities and Exchange Commission.

While APS was no doubt a venomous amalgam of ill-intentioned evil-doers, I can't help but miss them. If nothing else, they were fun to hate and crusade against. For now we can only celebrate the defeat of a parasitic giant while we wait patiently for the void they left to be refilled by the promotional scumbags they left behind. I imagine we won't have to wait long. I for one, am going to put on some tea. Any takers?

4 Huge Reasons Bitcoin is Worthless

Bitcoin, the first digital cryptocurrency introduced in early 2009 by the by pseudonymous developer Satoshi Nakamoto, was designed to circumvent institutional influence by offering a more direct person to person exchange of currency. It is, in more ways than it's supporters would like to admit, analogous to cash. Additionally, and the reason why I was interested in writing about it, is that it seems to possess a similar anatomy to that of a penny stock pump and dump.

At the time of this writing, a single bitcoin is worth around $121 USD. Back in April it was valued around $260. Some people have even been so ridiculous as to speculate that it will be worth $100,000. That's certainly impressive but also brings to light the unsettling issue of volatility considering it's worth plummeted by more than half in about a month's time.

Don't fix it if it ain't broke

It's a mantra we hear a lot, and for good reason. It's a waste of time and resources to replace things that are still working without serious issues. Cash already provides us with a deregulated method of trade. If you don't trust institutions, no one is forcing you to keep your money in a bank. The fact is, more often than not, institutions aid us in the safekeeping of our money and governments work to ensure they do it properly.

While the European dept crisis certainly demonstrates the disturbing possibility of what can happen when those plans go south, it's not difficult to point out why bitcoin doesn't offer much in the way of a solution.

Bitcoin is overly technical and nonintuitive

Even the most basic explanations of how Bitcoin is structured and expanded will make the heads of the average reader begin to spin. There is in fact a reason why things like gold and silver have high values; they're tangible, easy to understand, and pleasurable to look upon. Bitcoin, by contrast, is none of those things, barring the way to wide adoption. And of course wide adoption is absolutely necessary for a currency to work because if people don't accept it, they consider it worthless.

This problem is compounded by the currency's dependance on a network. While traditional currencies can be minted and printed to facilitate quick and painless trading, Bitcoin only offers the bulky series of numbers and letters called an address which look like this: 16yXE5cEbKTRbm4U8LFydp1Q9egWHcpcQ9

Bitcoin still relies on institutions

If Bitcoin hopes to survive in the world of traditional currency, it needs some way to be converted between them so as to establish its relative worth. For this it must rely on several loosely regulated groups such as Mt. Gox and Dwolla with essentially no safeguards as to their stability or longevity.

Bitcoin owners are also vulnerable to the same vulnerabilities as people who decide to keep all of their money under a mattress. Computer failures, fires and theft can all result in the loss of your digital wallet and thus your money. While there are workarounds for these problems, a similar level of effort and care can be used to protect your traditional forms of currency which again begs the question, "why switch?"

An internet based currency is plagued by internet users

You don't need a degree in social psychology to notice that anonymity brings out the worst in us. Reading a handful of YouTube comments will prove that point to anyone. In this regard, Bitcoin at an even bigger disadvantage than traditional currencies.

Honest Bitcoin users must traverse a minefield of scams and thieves while using their money in any transaction. Without the sort of regulation that traditional currencies are subject to, Bitcoin users have little recourse to fall back on when they're cheated. Take, for example, an interaction in which two people agree to trade a laptop for a number of bitcoins. Person A sends 5 bitcoins to Person B who then decides not to send that laptop after all. Person A has no one to seek justice from as their government likely doesn't acknowledge Bitcoin as a true currency, thus making it legally unclear if a theft actually occurred at all.

Furthermore, Bitcoins are no longer the sole digital currency which exposes another problem with unregulated currencies. Anyone can make one. The new cyptocurrencies, known as altcoins in the Bitcoin community, serve to make the value of the original more arbitrary and diluted. There are also many rumors that some of these altcoins are controlled by organized crime networks, which makes sense given the lack of concrete legislation overlooking these digital creations.

Personally, I'd rather work on improving the currencies we already have before I start investing in a new one that seems to have a dismal future and no clear hope of overcoming the problems we currently face.

Why XUII Dumped & What's Next

Today XUMANII (XUII) crashed following the release of a lawsuit put forth by George Sharpe. Mr. Sharp alleged that the promoters were in violation of anti-spam laws.

According to the article on yahoo:

Named as defendants in the case are: Degroupa Tenner Morales Media Corp. and Centro Azteca S.A., the current and former publishers of the Awesome Penny Stocks series of newsletters; and, Victory Mark Corp Ltd., the publisher of newsletters Select Penny Stocks, Preferred Penny Stocks and Penny Stock Heroes.

The problem is, I don't think any of the promoters actually are in violation of the anti-spam laws. Their subscribers voluntarily sign up for the alerts, and all of the emails come with links that allow you to unsubscribe. Consequently, I don't expect the lawsuit to stick or the pump to be over yet. As I write this, it is already on its way to at least partial recovery. While I'm not confident enough to buy this myself, I think it's more likely than not that it will return to the .40s tomorrow. That being said, if you're unfamiliar with the nature of pump and dumps, and you're reading this because you are completely confused by what has happened today, I advise you to close your position. This stock already has too many red flags even before you start looking at fundamentals.

4 Reasons I Don't Trust XUII as the New APS Pick

1. Awesome Penny Stocks usually releases their picks on Tuesdays or Thursdays, not Mondays.
2. While XUII traded millions of shares in premarket and many traders considered this confirmation of the alert, the pick wasn't confirmed by email until around 10:30am. Lot's of speculation creates sketchy unpredictable price action.
3. XUII started getting pumped by Victory Mark Corp. on May 1st which has made it more crowded and less relatable to previous APS pumps
4. $ACCS which was speculated to be the new pick before the open did have a classic pre-pump chart. While I'm just guessing here, it made me wonder if they intended this as the pick, then switched to XUII to kill frontrunners. That would also explain the alert being delayed until around 10:30am.

I was hoping that APS would recall their pick but that seems less likely now that they have placed an XUII banner on the website. Regardless, I won't trade this like I would other APS picks. It's just too different which I consider to be risky.

Watchlist: LOTE, WSGP, POLR

Lot78, Inc. (LOTE)

The size and strength of this pump is so anomalous that it's rather scary to trade. It wouldn't surprise me to see this thing to hit $20 but it also wouldn't be very shocking to me if it crashed all the way to $6 tomorrow. While that sort of volatility is exciting and worth watching for, I haven't traded it. I much prefer lower risk plays. I'll continue to look for shares to short but even if a bunch become available, I'll keep my position size low just in case this thing isn't done being ridiculous yet.


Western Graphite Inc. (WSGP)

A Tobin Smith pump and dump with a disclosed budget of $1,813,286. I first received an email about this on the 22nd of April which also linked to the pump's landing page. I imagine that the landing page went up on the 19th from looking at the volume in the chart. Considering that this pump is getting a bit old, I wouldn't want to hold a sizable long position for very long. The price action hasn't been very bearish yet so I'm not ready to start shorting. It might be an option to buy some dips and sell the bounces but I'm hoping for some strong upward spiking in the next few days that I can feel confident to short in to.


Polar Petroleum Corp. (POLR)

Sort of similar to WSGP in pump style, this one has a disclosed budget of $700,000 on the landing page. It doesn't seem to be getting quite as much attention as other pumps in the market so I highly doubt it will have the momentum to breakout past it's previous highs around $4.25. Everyday that it continues up, I am looking to short it more aggressively.

GOFF: Fool's Gold For APS Subscribers

Earlier this morning AwesomePennyStocks (APS) released GOFF as their latest pick. APS describes Goff Corp. as a mining exploration company with interests in the Aguadas, Department of Caldas, Colombia area. The goal of this promotion seems to be to convince naive investors of the great potential in gold, diamond and silver discovery within this area.

The reality of course is that Goff Corp. is a terrible company that doesn't deserve to be trading at anything more than a penny per share. And that's being generous.

Goff Corp. wasn't always a mining company. It was originally incorporated on July 12, 2010 and aimed to "provide web-based networking and job-placement services for employers and individuals seeking employment in the UK and Ireland" (Form 8-K). The company failed to meet this goal due to inadequate funding.

Goff Corp. has only been a mining company for a grand total of 11 days including today. The recent change in company focus coincides with a change in management as well. The shell had previously been run by Gary O'Flynn and Patrick Corkery, both of whom resigned on February 26th of this year. The sole director of the company is now Warwick Calasse who bought his controlling position in the company (108,750,000 shares) for a mere 25 grand. That amounts to just 0.0003 dollars per share and provides a good indication of what the previous directors considered the worth of the company to be. Previous financial reports confirm this by showing zero income and substantial expenses resulting in a net loss of $29,000 this past year alone.

 If you tend to be an overly trusting person who falls victim to the fluffy bullshit of promotional emails, write down this quote from the companies own 8-K filing and stick it to your monitor:

Since we are an exploration stage company, there is no assurance that a commercially viable mineral reserve exists on any of our current or future properties. To date, we do not know if an economically viable mineral reserve exists on our property and there is no assurance that we will discover one. Even if we do eventually discover a mineral reserve on our property, there can be no assurance that we will be able to develop our property into a producing mine and extract those resources. Both mineral exploration and development involve a high degree of risk and few properties which are explored are ultimately developed into producing mines.

The task of discovering said minerals seems further complicated by the fact that the company doesn't have any employees.

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SWVI: The Dangers of Golf Apparel Mining Companies

Swingplane Ventures, Inc. (SWVI) is an overvalued company poised for a massive collapse in stock price. According to the description found on Yahoo Finance,

"Swingplane Ventures, Inc., a development stage company, manufactures and sells men’s and women’s golf apparels. Its clothing line consists of tailored-fit golf shirts, pants, and skirts. The company focuses on marketing its products under the Swingplane name through online sales directly to the consumer. Swingplane Ventures, Inc. was founded in 2010 and is based in Broomfield, Colorado."

Strangely, and according to the company's own website, the company actually operates as a mining exploration company that concentrates on the acquisition of copper ore.

The company is currently being promoted by AwesomePennyStocks and its affiliates which is why it is currently trading at levels far above its actual worth. Unsurprisingly, the company didn't have a single news release from the time of its inception in 2010 until late this January when the stock promotion began.

Considering the 472.5 million shares outstanding, the company currently has a market cap of around 190 million dollars. So how much money does this company make in order to be valued at that price? Zero. None. Nothing. As of the last quarter ending September 30th, 2012, SWVI has no income and a debt of  25 thousand dollars in net tangible assets.

Looking back at the last APS pump FARE, counting from the first day of massive volume to the peak of the pump, we see that the promotion lasted about 14 days.

Counting in the same manner we can see that SWVI is due for a similar collapse.

WUHN: One day wonder

Wuhan General Group Inc. (WUHN), was pumped last night and early this morning by Penny Stock St★r (Tribeca Investments Ltd.) and Marquee Penny Stocks (MHC Inc.). Both entities claimed not to have received compensation for the promotion. In conjunction with this pump, Equities Awareness Group LLC, another pumper, released a press release which could be seen on yahoo finance. The PR featured WUHN along with several other promoted stocks that also had big moves today (MKRS, PIEX, GMEC).

Since neither promoter was compensated with shares, there wasn't as much selling pressure and the price actually held up reasonably well throughout the day. Unfortunately for the followers of the newsletter, the stock gapped up around 350% making the potential for further upside rather dismal. In fact, the high of the day was hit just 35 minutes after the open and showed few signs strength for the remainder of the day.

Despite the fact that the average trader wasn't given a very good opportunity to make money on this stock, the promoters can still call it a job well done. Now they get to brag about their 1,034% intraday profit (which they have in after-hour emails) as well as post a little badge on their website saying they alerted the ticker before such a big move. As you might have gathered, the purpose of these uncompensated pumps is less geared towards making money and more towards building a following of gullible traders. The lazy trader who didn't do their research might read those celebratory emails and decide to invest lots of money into the next pump by Tribeca and/or MHC, with dreams of their money being increased 10-fold. Such reasoning is dangerously flawed and will more likely than not result in a large loss.

For one, future picks by these pumpers will likely be compensated which significantly alters the price action of the pick due to promoter/insider selling. As such, the performance of an uncompensated pump cannot and should not be used as a predictor of performance for compensated picks even from the same promoter. Furthermore, and as we saw today, the intraday percentage gains of these pumps are highly misleading. In reality, the stock only uptrended for a small fraction of the day making it difficult to sell for a profit.

Even if you're familiar with the risks of pump and dumps, these sorts of promos can be dangerous to short sellers. The huge gap up was attractive to shorts and shares to borrow seemed to dry up close to the open around the 0.25 level. Those who shorted that low had to sit through a terrifying squeeze up to 0.45 and are still underwater at this point. Since uncompensated pumps can run so wildly and may not be subject to a catastrophic dump in the near future, there is a whole lot more to lose than to gain with these sorts of plays.

To summarize, read the disclaimer at the bottom of the pump emails/alert pages and be aware of the dangers that uncompensated pumps pose, both for longs and shorts.

Best Damn Penny Stocks: ZPPB

Best Damn Penny Stocks (BDPS) released Zippy Bags Inc (ZPPB) as their new promotional pick this morning. On the alert page, BDPS reported being compensated $500,000 for the promotion. I received my first email at 9:39am although I heard that others received emails as early as 9:32am.

This time difference is of critical importance if you hope to trade these sorts of moves considering the price had quadrupled within five minutes of the open (before I even received my first alert). Unfortunately, buying after the first few minutes of trading is exponentially more risky with less potential for profit.

That being said, there is still the opportunity to make money later in the day so long as you can tolerate greater levels of risk and can afford to lose your investment should things go sour.

I personally fall under that category of high risk tolerance so I bought 20,000 shares at $0.27 just for 3pm. Unfortunately, I can't say that it was a great trade but I can explain my thoughts to give you an idea of how one can trade these pump and dumps.

Before making such a trade, you need a decent background in pump and dumps, especially BDPS pumps since each promoter's picks behave differently. Previous pumps also offer a better idea of how current picks will perform so it's useful to look back at old charts (in other words, this post will be helpful in the future).

Honestly, I didn't find as many intraday charts from previous BDPS pumps as I perhaps should have before entering into my trade. Instead I was relying on my memory that BDPS pumps rarely dump on the first day of the pump. Another somewhat sloppy mistake that I made was entering my buy order while the stock was hovering in the 0.28-0.29 range during the hour before I was executed. I knew there was support at 0.27, which is why I set my buy there, but it would have been much less risky to simply wait for that level before sending my buy order. As you can see from the chart, the price actually broke through the 0.27 level and even touched 0.25 for one tick which gave me a nice little heart attack. Had the stock continued to fall, I probably would have lost most of my investment.

In order to avoid such panic attacks, you can set price alerts using your brokers software which will audibly alert you to a specific price level. That way you can decide whether the bid support looks firm enough to buy or if it looks like there may be more dipping before a bounce. Watching Level II will greatly aid you in this decision. The caveat though is that many other traders will be doing this as well, making it difficult to get an execution once the price begins to bounce. That though is the quintessential obstacle in trading pumps; it's difficult to buy at the lows when there is strength and it's difficult to sell when the stock is falling and you're watching your money disappear in front of your eyes.

Lucky for me, the stock didn't collapse at that moment and I went on to make a profit. I knew from the previous BDPS pump BFLX that I wrote about here, the price tends to uptrend in the final hour and close strong. From looking at daily charts of previous pumps, I had decided that it would be too risky to hold my position over night since these pumps don't last for very long compared to Awesome Penny Stocks (APS). I set my sell at $0.30 since price action seemed to consider it a key level throughout the day. I initially thought it would even break .30 for a very strong close considering the rise in volume during power hour so I thought I didn't think I was being greedy. Unfortunately the highest tick was 0.2999 and I didn't get executed. A good lesson there is to take safe profits when you have them especially when building a smaller account.

Contrary to my predictions though, the stock actually dipped during the final minutes of trading and I had to exit at an average of 0.286. I also failed to close my entire position and remain long 2.5k overnight. Based on previous pump performance and the tiny position size, I plan to sell my remaining shares tomorrow at the open. After that I may look for shares to short in anticipation of the dump.

Update: Closed the last of my position for a small additional profit. As I expected, BDPS does not provide good setups for gap-up plays. If that's your thing, consider the next APS pump keeping in mind that for each additional day into the pump, the risk of the dump becomes greater and may even occur on the first day if the pick is recalled, the stock is halted, or the company releases a PR stating they have no involvement in the pump and don't know why the price is jumping so much.

The myths and mistakes of amatuer traders

Even if you only trade occasionally, you've probably consulted some form of internet community for advice, be it a trading forum or chat room. If you haven't, well, you're doing it now. There is a plethora of great information out there, unfortunately it too often seems that for every good tip, there are 5 poor ones that are more likely to steer you into the habits of an unsuccessful trader. In this post I hope to list and debunk some common myths that I often encounter online.

• "I want to play BLAH but I don't know how... should I buy or should I short?"
• "I know it's a bad short, so it must be a good buy."
• "I know it's a bad buy, so it must be a good short"

If you don't have a good idea of which way a stock is going to move, don't play it at all. Just because something is a bad buy or short, does NOT mean that it is a good idea to play the stock in the opposite direction. A stock may be a poor short because there is strong technical support close to where the stock is currently trading. There may also be strong technical resistance above where the stock is currently trading, meaning that it would be a bad trade regardless of whether you went long or short.

• "BLAH is going to teh moon!!!"
• "Long BLAH"
• "All in... BLAH"

It is also imperative that you consider all aspects of the trade. Do not fall victim to the false security of seeing several other traders make the trade you are thinking about. Since 90% of traders lose money, the odds say that those traders just made a bad call and you would be wise to think before blindly following. Read all recent news, and check if there are any planned announcements on the horizon. There are also much less obvious factors such as the release of share lock-ups that could take you by surprise and cause you to lose money. The more research you do, the better you will be prepared to make a good trade.

• "BLAH is still being pumped/promoted... it will go back up/it isn't dead yet"

Stock promotions can take many forms ranging from internet forum hype, paid internet ads, spam emails, to mentions of the company on TV. Many people mistake these promotions as a risk free cue to buy. While it is true that many stocks rise initially, even that isn't a certainty. Furthermore, a promotion can go on for weeks as the stock continues to drop. The purpose of a promotion is to allow shareholders to sell so anything being promoted will be inherently burdened by selling pressure. Many times this selling pressure outweighs buying interest, causing price to fall and you to lose money if you buy into the promotion hype.

• "BLAH heading north, guarantee that it will hit 5.50 by next week."

There are times when all factors may point to the stock behaving in a certain way. However, even in these cases it is important to shift your thinking into terms of risk and reward. If all your research seems to indicate the stock moving in a particular direction, you may have low risk, but there is always some risk. There are NEVER guarantees in the trading world and you should certainly never take the word of an anonymous internet user of any such "guarantee."

• "Any trade that makes you money is a good trade!"

False. Good luck can make you money on a bad trade. If you fail to recognize a bad trade (even if you made money on it), you are liable to continue making such trades which will ultimately come back to bite you in the ass.

• "I'm in BLAH now but I don't know when to get out."

You should plan your exit before you ever enter a trade. If you find yourself in a trade and don't know what to do, it is best to get out.

What is a pump and dump?

According to investor.gov,

"Pump and dump" schemes have two parts. In the first, promoters try to boost the price of a stock, typically in a microcap company, with false or misleading statements about the company. Once the stock price has been pumped up, the promoters seek to profit by selling their own holdings of the stock, dumping shares into the market, which typically causes the stock price to collapse.

While this is true, this definition is incomplete. For one, the purpose of the promotion is not solely to raise the stock price. Often the people paying for the promotion are insiders or investors who were compensated by the company with shares at a fraction the current market value. Because of this, their interest is merely to create volume to sell into since selling at any price would provide them with a handsome profit.

The important thing to understand though is that the people being paid to promote the stock are biased by the compensation. Their motivation is to paint the picture of a healthy company worth buying into. Thus, their claims can be exaggerated, misleading, or just plain lies. If you are ever advised to invest in a company, closely inspect the communication for some sort of disclaimer that may indicate the person has been compensated. Often times, this disclaimer appears at the bottom of emails.

Since the purpose of the promotion is to sell shares, there will be a constant downward pressure on the stock price. In the beginning of the promotion though there are usually enough enthusiastic buyers to counteract this selling to cause the price to rise. Once this hype and excitement wares off, the stock price usually falls dramatically. Often, such promotions occur on bulletin board exchanges where there is less liquidity. As a result, it is difficult to sell out of these stocks once they begin to show signs of weakness making them a dangerous investment even if you are aware that it is a pump and dump.

The safest way to play pump and dumps is to buy at the very beginning of the pump if you know the promoter has a solid track record of raising stock prices. The time you hold that stock should relate to your level of risk tolerance. Selling quickly for smaller gains is the least risky strategy and is a good way to build a small account. Holding the stock longer may allow for larger gains but it also presents the risk of large losses due to the difficulty of exiting just before and during a crash. Such a strategy should only be performed by more experienced traders who understand the risks at hand.

A sample promotion email:

GWBU closed green on Friday with a gain of 3.50%. This week could be very significant after one week of being relatively flat.We believe GWBU could be ready to break $2.00 in the very short-term and potentially reach $10.00 or more as predicted by a recent Seekingalpha Analyst.If the Analyst's prediction is achieved, members could be looking at over 800% in gains.Let's look at the TOP 10 Reasons why everyone should consider GWBU before it is too late!#1- According to the company, GWBU focused on developing technologies that reduce fuel consumption by as much as 15% and cut emission by over 70%. This is a technology in huge demand around the world.#2- Just in the States alone there is over 250 million vehicles that could use this technology to reduce fuel consumption and emission. Globally we are talking over 800 million vehicles that could potentially use GWBU's technology.#3-Currently, the global clean-tech market is estimated at $284 Billion and is projected to grow to more than $1.3 Trillion by 2017. Start Technologies Europe I.G.’s technology (GWBU) increases energy efficiency, reduces pollution and is applicable on a global scale.#4- ELASIS Research Centre( part of FIAT Group, 6th largest automaker in the world) worked with GWBU in the past.
Results showed emission reduction by over 40% and fuel consumption by over 10% on a 2003 FIAT Scudo. (see the full report here: http://www.starttechnologiescorp.com/technology/research-reports/)#5- GWBU recently announced contracts that could be worth over $50 million USD. Could there be more contracts on the way?#6- A recent positive test with the Transport Ministry of Barbados showed that GWBU's technology increase fuel efficiency by 20% and significantly cut emission. More evidence that the company's technology is working!#7-  Recent Analyst stated that "majors like Ford, Chevy, and Dodge could be interested in GWBU's technology!" This interest could significantly increase the value of the company in the future.#8- After a week of consolidation, we think GWBU is ready to make a move North. We've seen this in the past, and we believe history will repeat itself very soon!#9- The Reg sho on GWBU shows over 10 million shares in short volume just in the last few weeks. A major short squeeze could propel GWBU much higher!#10- If GWBU can replicate our last pick's percentage gains it would soar to
around $10 in the coming weeks!At these levels, we think GWBU could be a steal and we urge our members to start looking into the company.Sincerely,The Free Investment Report Team

And the associated disclaimer:

(Note the $100,000 expected payment in the final paragraph)

GWBU: Why you shouldn't buy

The following research will hope to reveal why you should think twice before buying into this company. This post will mainly be geared towards those of you who are inexperienced traders as the main goal of this blog is really to protect people from huge losses. I'll be going into as much depth as possible though so I expect this to be of value to experienced traders who already understand the pump-and-dump nature of this stock.

To begin, according to the yahoo business summary, Great Wall Builders Ltd. (GWBU) is...

...a development stage company, focuses to provide homes in the United States and China. It plans to design and sell homes with solar integrated systems, such as solar integrated roof tiles, solar hot water heaters, and solar electric photovoltaic systems. The company intends to market its products through commissioned employees and independent real estate brokers. Great Wall Builders Ltd. was founded in 2007 and is based in Houston, Texas.

It based on the price as of this writing, it has a market cap of 575M which is actually a bit low for past APS pumps (may be one reason to expect the price to increase in the future). The company has zero revenue, zero cash on hand, and according to the latest 10-Q: "As at December 31, 2011, the Company has a working capital deficit of $63,283 and an accumulated deficit of $126,783."

The company has very recently seen a change in management which could be seen as suspicious. The previous CEO had been Peter Evan Bell. According to the financial times:

Mr. Daniele Brazzi has been appointed as President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, Director of Great Wall Builders Ltd., effective March 23, 2012. Mr. Brazzi has studied general electronics, electrical engineering and applied electronics. He has collaborated with prestigious brands such as Sony, Kenwood, Clarion and Alpine in the automotive area, developing new technologies. He graduated in medicine for the construction of medical electrical, specific for bio-resonance to treat pathogens, and iris scanners, to detect early disease of human body. Mr. Brazzi has also worked in the orthopedics are for the Rizzoli Institute, Bologna, on ambulatory equipment. Over the past 10 years, Mr. Brazzi has worked in the specific area of the combustion engine, specifically in reducing emissions in the combustion engine. His most recent experience has let him to develop the START device, which boasts more than 800 worldwide installations.

Mr. Jay Almeida has been appointed as Treasurer, Secretary, Director - Operations, Director of Great Wall Builders Ltd., effective March 23, 2012. Graduated from the University of Chicago with a degree in economics. In addition, he graduated as an engineer from Universidad Santa Ursula, Rio de Janeiro, Brazil. Mr. Almeida has a masters degree in Marketing from Universidad de chile, Santiago, Chile. Mr. Almeida also has a Phd. in Engineering Economics from Bonn University, Germany. In 1999, he was nominated as Ambassador of Commerce of Florida for all Latin America and Caribbean countries. After a career as a bank industry for 14 years, Mr. Almeida moved to the US in 1989. Since 1990, Mr. Almeida has served as the President and CEO of PHN Group. PHN Group is an international business group of 5 companies involved with foreign trade (importation, exportation, business representations, international business consulting, trade finance and security technology) in all Latin America, Caribbean and European countries.

According to a marketwire report, the company also took on Mr. Dominico Chiovitti, as a Board Member:

From 1967 to 1992, Mr. Chiovitti was a Senior Chemist and supervisor of the Petro Canada Laboratory in Montreal, Canada. During his career, Mr. Chiovetti controlled and researched several new products, specifically Vanadium Pentoxyde derived from fly ash. Mr. Chiovetti was responsible in the design and development of a method to control CO & CO2 levels for industrial gas discharges into the environment, while collaborating with the Center of Emissions Control. Mr. Chiovitti is a member of the Order of Chemists since 1979 and graduated from the University of Montreal with a Bachelor of Science in Chemistry in 1967.

Although none of these new individuals seem to be involved in any significant issues, the most damning piece of evidence is that Mr. Brazzi also currently serves as the director of research and development at Dpollution International Inc (RMGX.PK). This company has also been previously involved in several stock promotions which include Wall Street Grand, a Lebed pick, a stock egg alert, and several StockMarketLife promotions.

To give you an idea of the success of this company and promotional strategy, RMGX once traded at 80 dollars a share and now is only worth 4 cents a share.

On March 19, 2012 GWBU actually entered into an Asset Acquisition Agreement with RMGX in exchange for 27,306,793 shares of restricted common stock. According to this same SEC filing, "Following the completion of the Agreement and the SPA, Daniele Brazzi control approximately 50.3% of the issued and outstanding shares of the Company." Thus he has a lot to gain from such a promotion if he plans to sell those shares into the promotion.

Another interesting tidbit that seems sketchy and was pulled from an SEC filing is that Peter Evan Bell, one of the previous CEO's quit his position 14 days after taking it on before being reappointed a while later: "On August 3, 2011, Peter Evan Bell was appointed as President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and a member of the Board of Directors. On August 17, 2011, Mr. Bell resigned from all positions with the Company."

As with any pump-and-dump the moral of the story is that the stock will eventually crash, usually within a month. Based on recent past APS picks, these stocks don't make it much past 2 dollars before tanking although this pick began its official promotion at a significantly higher price. Therefore, it is uncertain as whether 2 dollars can be used as an accurate historical measure of the top. Either way though, being long in this stock will become increasingly risky for each passing day.

Another significant factor with this pick is that there are actually shares available to short which has not been the case for the APS picks of the recent past. This means that there will be an awesome profit potential for shorts at some point in the future but I would not suggest shorting this early. It is possible and I think likely that the promoters will manipulate the stock higher in an attempt to squeeze these shorts would could allow the price to reach higher levels than we have recently seen.

If you are still skeptical about the level of sketchiness with this company and the associated promotion, I suggest you check out my post on the most recent APS pick, SNPK to get a sense of how right I was in predictions of what would happen over the next few months while it was being promoted.

GWBU & ENRG?: AwesomePennyStocks Pick

Today AwesomePennyStocks (APS) again impressed me with their sneaky promotion tactics. It seems as though their official release was today with GWBU although ENRG was also released by pennystocks123, what is (or maybe used to be) an APS sister site. Either way though, ENRG isn't trading with any sort of strength so I would avoid it regardless, unless it can prove with volume and price action that it is going to make a move.

The problem with GWBU though is that you can't treat this as day 1 of the pump, as it has been trading with elevated volume for the past few days. Thus, if you have also just discovered it today, I would trade it as you would previous pumps after the first week. The sort of strategy I encourage here is a conservative one, thus I decided not to go long on the stock immediately. Instead, I will sit on the sidelines to see how this confusing situation plays out and wait for any major (20%+) dips to take advantage of.

RARS: What the hell is going on?

For better or worse, I was traveling this past week and wasn't able experience all the drama of the Rarus Technologies Inc. (RARS) play this past week. Since getting back though, my research on the stock and it's promotion has turned up some strange results.

I'm sure many of you are frustrated and confused by what has happened since the stock became the next big play on Wednesday afternoon.

The reason that this stock has been trading so unexpectedly is because everyone was expecting the stock to be the new Awesome Penny Stocks (APS) play. If you are unfamilar with APS, this pumper has recently pumped SNPK, NSRS, AWSR (briefly), and AMWI. It is still presently unclear whether RARS is actually an APS pick, thus the lack of strength in the stock.

Before I even move on to explain what is going on in more depth, there is an important lesson to be learned from this. You can never assume that any single play is riskless and deserving of a dangerously high percentage of your account. The people who pay for these pumps make money from other people losing their money, which should serve as a constant reminder to never trust them in keeping a stock up. If the thought "This can't drop too much, its the very beginning of an APS pump!" ever crossed your mind, then you're thinking about this the wrong way. Pump and dumps can provide some great opportunities to make money, but they are also inherently full of risk due to the nature of a pump and dump. If nothing else, RARS should serve as a valuable lesson for risk management in the unpredictable world of pennystocking.

A quick overview of that happened on Wednesday, is that RARS was released by preferred penny stocks, hero penny stocks, and select penny stocks in afternoon trading. In the recent past, these big picks have been released in a rolling release through all APS/CP sister sites over the course of a few hours. In this particular case though, only these few sites released RARS as the pick, while another group of related APS sister sites re-released SNPK as their pick.

As for the more thorough analysis, nothing is completely clear at this point, so I can't promise that my research is free of error. What seems to be the case though, is that RARS should more appropriately be called a Victory Mark pump rather than an APS pick. That being said, Victory Mark seems to be related to APS since they pumped SNPK and NSRS, the last clear APS/CrazyPenny picks. It is possible though that Victory Mark is now a completely unrelated pumper since they pumped these past two stocks differently (different emails bodies, different time frame) than the APS group.

After that first day though, everyone was expecting the APS/CP sites themselves to release the pick overnight. When that failed to occur, the stock gapped down and has since continued to fall. Even now it is unclear whether RARS is going to be released by APS so I would not suggest buying it here. In a situation like this, when things are unclear, it is best to stay away from it altogether. Staying profitable is all about keeping your odds high, and when you gamble in the hopes of making big profits, you may as well throw away your money in a casino.

NIA Pump: SYNC

Update: Following an analyst downgrade, the stock hasn't really been able to recover. When such an event occurs, it becomes difficult for pumpers to continue their exaggerated claims of greatness and reality sets in more easily. It remains unclear as to whether SYNC will ever return to its pumping highs, although we saw a recovery of SNPK following a similar event with the announcement of a FINRA investigation (unrelated pumper). The only thing that seems certain at this point is that SYNC will never reach the same price levels as BVSN did.

Around 9:58 this morning, the National Inflation Association (NIA) announced it's latest promotion as Synacor Inc. (SYNC). Johnathan Lebed of Lebed.biz and one of owners of the NIA, also announced that SYNC was his new pick. As a result, their previous pump, BVSN, dropped nearly 8% through the support it had held for most of the week. Although NIA stated in the initial email that it still held shares of BVSN, I suspect it won't return to these levels in the foreseeable future.

Considering that BVSN was a multi-month pump, there are very good odds that SYNC sees more upside over this next week although anything beyond that is uncertain. NIA did not seem to provide much artificial support intraday however, considering the alert caused a massive spike that quickly fell back to prepump levels. I myself took a small position on the dip considering the superior risk/reward and expect to see a significant gap up tomorrow.

Already the stock has seen some upward trending in after-hour trading probably as a result of traders realizing it is the new NIA pump as well as traders seeing the bullish action after finding it on % gainer scanners such as yahoo. SYNC has since received further pumping from Lebed and Wall Street Grand (WSG), further increasing the chance of a morning gap up.

I should also remind people of the massive fall that BVSN suffered following its highs that have only continued since then. Do not trade this with the hope of massive gains. It is unlikely that SYNC will be as successful of a pump as BVSN was although based on just some quick glances of the company, it does not seem to be as much of a shell as BVSN was. As such, there might be some potential in this pump and I look forward to seeing how far it can go. That being said, there is a very good chance that I will exit my position in early trading tomorrow just in case.

Don't take any unnecessary risks kiddos.

Original email:

NIA already owns a large position in its new stock suggestion. Please see our disclaimer at the bottom of this email for information on the amount of shares we own, our purchase price, and the holding period we have agreed to.

NIA's last stock suggestion BroadVision Inc. (BVSN) gained from its December 12th suggestion price of $8.31 to a high on March 6th of $56.46 for a gain of 579% in less than 3 months. Although NIA remains very bullish on BVSN at its current price of $24.03, NIA just made a major new discovery that it believes could become its next BVSN.

Synacor Inc (SYNC)

Currently: $8.84

http://synacor.com

SYNC's customer-branded platform enables cable, satellite, telecom and consumer electronics companies to deliver TV Everywhere, digital entertainment, services and apps to their end-consumers, strengthening those relationships while monetizing the engagement.

The hottest stocks on Wall Street this year are cloud computing plays and NIA believes SYNC could become one of the biggest cloud computing winners of 2012. SYNC just went public in February at an IPO price of $5 and has been starting to break out in recent weeks after reporting unbelievably strong 1st quarter results. NIA considers SYNC to be insanely undervalued compared to all other 2012 cloud computing IPOs.

SYNC's integration, authentication and engagement platform enables cable, satellite, telecom and consumer electronics companies to deliver digital entertainment, services and apps to their own consumers, thereby strengthening those relationships while monetizing engagements. With 45+ customers, 21 million high-speed Internet households, 81+ million average monthly search queries, 2.8 billion average monthly advertising impressions, and 75+ content partnerships, SYNCdelivers a compelling consumer experience across multiple devices.

SYNC has only 26.74 million shares outstanding and a market cap at $8.84 of $236.38 million. SYNC has grown their revenues from $39.9 million in 2007, to $52.6 million in 2008, to $60.8 million in 2009, to $66.2 million in 2010, and $91.1 million in 2011. SYNC recently reported record 1Q 2012 revenues of $30.7 million, up a stunning 64% from 1Q 2011 revenues of $18.7 million. SYNC announced that they expect full year 2012 revenues to equal between $123 million and $126 million.

SYNC's 2011 revenues of $91.1 million were up 38% from 2010 revenues of $66.2 million. If SYNC generates $126 million in 2012 revenues they will achieve growth this year of 38% once again!

Let's take a look at the valuations of other recent cloud computing IPOs:

Guidwire Software (GWRE), revenue growth last year of 19%. Trading for 8.23x 2011 revenues.

Demandware (DWRE), revenue growth last year of 54%. Trading 13.44x 2011 revenues.

Infoblox (BLOX), revenue growth last year of 30%. Trading for 7.20x 2011 revenues.

Proofpoint (PFPT), revenue growth last year of 26%. Trading for 4.75x 2011 revenues.

Brightcove (BCOV), revenue growth last year of 45%. Trading for 8.23x 2011 revenues.

These 5 other cloud computing IPOs from this year have similar revenue growth to SYNC and they are trading with an average price/sales ratio of 8.37. If SYNC was trading for 8.37x their 2011 revenues it would have a market cap of $762.5 million and a share price of $28.51. If SYNC generates 2012 revenues of $126 million and trades with a price/sales ratio of 8.37, SYNC would have a market cap of $1.055 billion and a share price of $39.44.

SYNC is profitable with 2011 net income of $9.9 million. Of the other recent 5 cloud computing IPOs mentioned above, onlyGWRE is profitable. DWRE, BLOX, PFPT, and BCOV are all losing money.

SYNC just announced yesterday morning that it has acquired Carbyn, the HTML5 Platform that delivers a unified experience for apps across Net-connected devices including smartphones, tablets, laptops, and connected TVs. Through this acquisition, SYNC will be able to offer customers a branded platform where their subscribers can enjoy a variety of content and HTML5 applications including video, music, games, newspapers, and magazines seamlessly by signing into their account on any device regardless of operating system (OS) or browser. Carbyn fills a gap in the marketplace and is a vital piece of SYNC's TV Everywhere content strategy.

Josh Constine of TechCrunch says SYNC and Carbyn "are a great fit, a veritable match made in the cloud."

Intel (INTC) a $144 billion company is a major SYNC shareholder. Charter (CHTR) a $6.13 billion company is a majorSYNC customer. CenturyLink (CTL) a $24 billion company is another major customer of SYNC. Toshiba (TOSBF) a $17 billion company recently became a major SYNC customer.

Disclaimer: NIA owns 350,000 shares of SYNC that it purchased at an average price of $8.53 per share. NIA has agreed to a 60 day holding period on these shares but intends to sell its shares at some point in the future after the date of July 2nd, 2012. NIA reserves the right to increase its SYNC position at any time. NIA currently owns 35,000 shares of BVSN. NIA intends to sell its shares and can sell them at any time. NIA reserves the right to increase its BVSN position at any time.

NIA is not an investment advisor. This email is not a solicitation or recommendation to buy, sell, or hold securities. Never make investment decisions based on anything NIA says. This email is meant for informational and educational purposes only and does not provide investment advice. NIA's co-founders have previously disseminated information about BVSN in other media outlets.

Additional legal disclaimer information: http://inflation.us/ legaldisclaimer.html