Lesson Learned!

[BlueCat]

Ok, like everyone else, I want to make money. I want to make money so bad that I am willing to open my mind (and wallet) and listen to every stock tip and can't miss opportunity.

I'd love to get into the details of how I got here and what I have done, good and bad, but I don't think anyone wants to read my autobiography.

So, let me get to the point. The following is a lesson in pumping and dumping, one that I hopefully won't get sucked in to...

Being new to the game, I joined a few forums and signed up for a few mailing lists. I got an e-mail on Wednesday telling me that a special e-mail was coming my way Thursday night. The e-mailer also reminded me of all his previous successes and 800% gains. I waited for his e-mail and sure enough at 6:50pm I got the magical e-mail!

The e-mail told me of this great company called Upturn (UPTR). I got three e-mails that night telling me that UPTR was going to be the next facebook. Upturn is going to rollout a new real estate site that is going to somehow integrate social networking. It was going to be bigger than Zillow, my wife lives on Zillow, this must be big.

I'm hooked!!!

A quick look at the stock told me it closed around .80 on Thursday. It opened on Monday slightly below .55 and had a big rise on Thursday. Despite the hype, I smelled a rat. I have to fight the urge to jump in on these types things. I need to force myself to be patient and to watch these types of stocks over a period of time.

Friday morning it opened .80 and almost immediately skyrocketed going as high as 1.05. I read a lot of hype on this stock Friday morning.

Low and behold just as quick as the stock jumped, it started to fall and continued falling all day. It closed at .56 just slightly higher than it opened at the beginning of the week.

WOW - for me this was perfect timing and a great lesson for me. DON'T believe the hype. I feel bad for people who fell for this and jumped in at $1. I'm not bashing the company and long term this might be a good stock. I guess I'm amazed at how stocks and people can be so easily manipulated.

My goal is to never fall into this type of trap and I will try and remember this experience forever.

Now I just need to figure out how to get into these stocks before the hype and not after!

Have a great holiday everyone!

[Weirdharold]

Welcome to SMC jgra44, I am happy you weren't one of those that bought in at the top.. that is what usually happens to new people... believe me I know from first hand experience.

If you will take the time to read the disclaimers on those sites you signed up for emails from.... most will disclose they are paid to promote stocks either with cash or stock...their only purpose is to cause a rise in the price per share so they can sell their shares.

This doesn't mean that that stock can't be played... just that it must be played carefully.... most experienced traders playing the pinksheet stocks will only attempt to make a quick gain. Personally I will take anything around 10%.

I took a look at UPTR chart and sure enough I found a rather good indicator that the stock was about to see some action... that indicator was the volume increase. If you notice that before the end of April there was very little volume on this stock.... averaging under (usually well under) 30k traded per day then the last trading day of April came a jump in volume to 158k traded followed with a couple days of under 60k traded then a big jump in volume again to close to 200k traded.... all with very little change in pay per share... then the next day a quick jump and fall back in price per share with 187k traded... then basically volume drying up again until May 14th where volume came in again at over 100k, the 15th volume declined to 69k to rise again on the 18th to over 200k followed by an 80k day with a pps increase. On the 20th it had a huge (for it) volume increase to over 300k with a nice increase of the PPS (from less than .60 to .70 slightly over 20%) closing at .70. The next day it did over 250k but also showed its weakness with a sell off just before close.... closing at .80 from a high of .90.....

Then came the disaster of Friday... gaping to open (after the email alert) at 1.05 to begin an all day decline back to around .55.

There were several great chances to play this stock for small gains... just none of them were after the email alert.

[BlueCat]

Thanks for the detailed response weirdharold. I'll be spending time here reading as much as I can.....

[BadThad]

Welcome to SMC!

Too bad you learned the hard way about pump and dump. Unfortunately, you're not alone, lots of people fall for these scams. Take your time, study and read our forum. You should learn a lot! Don't be afraid to ask questions and post opinions.....that's why we're hear!

[lonelystar]

I fell for this stock last year and bought this at 0.36 and all I saw was this stock dropping to zero. At the every end, this was not even traded. I was new to this and was hoping that this would eventually pick up at some point.
It never did. I can't sell this now, is there a way that I can at least report this on my tax returns as loss.
If so, what is the sale data and the price?

[BadThad]

Sorry to hear about your learning experience. They can be painful.

Yes, you may claim the loss on your taxes. Simply sell the stock and then give the info on the purchase and sale to your tax advisor.

[lonelystar]

Thank you for your reply.
This stock is not even traded anywhere.
I just cannot sell it anymore.
Again I am new to this whole process, is there a way to sell this?