I didn’t want to be an innovator anymore, I just wanted to make the quick and easy buck.

I just wanted in.

The Notorious BIG said it best: ‘either you’re slingin’ crack-rock, or you’ve got a wicked jump-shot.’

Nobody wants to work for it anymore.

There’s no honor in taking that after school job at Mickey Dee’s, honor’s in the dollar, kid.

So I went the white boy way of slinging crack-rock, I became a stock broker.”

– Boiler Room

It’s human nature to want to join the winning team, that’s why most buy a stock when it’s riding high. I have many friends who bought Bitcoin in the back half of December 2017, I watched in agony as crypto was getting more inflated than Deutsche Marks in the mid 20’s. When your 63 year old Mother starts asking you how to buy Bitcoin, you know it’s too late. Wait for some sanity and then make an entrance, but most people don’t see it like that. They hear ‘buy low, sell high’, then do the opposite, or they buy low and sell lower.

In Benjamin Grahams infamous 1949 book ‘The Intelligent Investor’ Graham outlines what he calls ‘Mr. Market’. Mr. Market buys when things are on the rise and sells after everyone else does usually at a loss.

Mr. Market loses money 90% of the time over a ten year period. This is the majority of investors.

Mr. Market and his ignorance creates a breeding ground for the pump and dump scheme to thrive. In 1995, Warren Buffetts business partner Charlie Munger gave a great talk on the psychology of human misjudgment that covers all of this in an entertaining and condensed way

As a newer investor, reading a classic like The Intelligent Investor will give you the framework to analyze stocks, not listen to hype and create your own value system for assessing stocks and assessments. Highly recommended reading.

How Pumpers Pump & How Dumpers Dump

A hack will take any client who pays and then market them to death to new investors who don’t really know how the game works. The hack will make a boat load of money early on, rinse their email list, ruin their name and be in a rehab center in Nanaimo telling tales of yachts, classy whores and wild nights. I’ve met these guys at their bottom, it’s not a pretty sight, you can see the empty void in their eyes.  If you want to steal, but don’t have the guts to point a handgun at your local 711 clerk, become a promoter.

These hacks made their money by convincing other people that their client is the real deal, they have to live the rest of their life knowing that they probably took money from hundreds or thousands of families and put it into their nose to mask their insecurity for a few hours. It’s hard to do a step 9 in rehab when you’ve screwed over thousands of people, I think my step 9’s consisted of only 28 people and even that took a while.

They often get cash and stock early on in a deal. That stock is then owned by the promoter and the promoter starts to write great things about the company. When you see massive spikes followed by massive declines, that is a very strong indicator that you are witnessing a real life pump and dump.

Quick guide to being a hack:

  • buy a penny stock email list
  • find/create a network of other people who buy penny stock email lists
  • find/create a network of sites to spread traffic
  • get a 10 second placement on a major network then use their logo
  • buy stock in the company you’re pumping after your article goes out to increase share volume
  • dump all shares at the moment when the hype is the highest, or right after the 4 month hold on your shares
  • talk about how your company or organization helps people and provides value
  • rinse & repeat

Earlier this year we wrote a satire guide on how to start your own pump and dump cannabis company

Highway Of Tears

Over time these people ruin their name and they get screwed with a huge tax bill for taking massive cheque swaps. Then they go on to do something else and the website or channel dies off, until the next big promoter comes in to take their place. It’s a never ending loop of people coming in to fill the shoes of the previous hack. These people have no future as someone more cutthroat and dishonest with a larger reach is waiting to take their place.

It’s just like Highway Of Tears murders in British Columbia over the last few decades. Dozens of young girls have disappeared on a stretch of highway in remote Northern BC. It’s been suspected that a number of different serial killers have used this highway as a convenient place to pick up, kill and dump bodies as populations are extremely scarce and many people hitchhike for means of transportation from town to town. It’s the perfect combination if you’re into that kind of thing, just as the ignorance of Mr. Market is the perfect catalyst to steal money from hoards of people.

Seth Said It Best

“I read this article a while back, that said that Microsoft employs more millionaire secretary’s that any other company in the world.

They took stock options over Christmas bonuses.

It was a good move.

I remember there was this picture, of one of the groundskeepers next to his Ferrari.

Blew my mind. you see shit like that, and it just plants seeds, makes you think its possible, even easy. And then you turn on the TV, and there’s just more of it.

The $87 Million lottery winner, that kid actor that just made 20 million o his last movie, that internet stock that shot through the roof, you could have made millions if you had just gotten in early, and that’s exactly what I wanted to do: get in.

I didn’t want to be an innovator any more, I just wanted to make the quick and easy buck, i just wanted in.

The Notorious BIG said it best: “Either you’re slingin’ crack-rock, or you’ve got a wicked jump-shot.”

Nobody wants to work for it anymore.

There’s no honor in taking that after school job at Mickey Dee’s, honor’s in the dollar, kid.

So I went the white boy way of slinging crack-rock: I became a stock broker.”

– Seth, Boiler Room

 

If You’re Legit, Mazel Tov

Let’s end this on a positive note.

If someone promotes a company that they actually believe will succeed in the long run and uses logic and facts to back up their argument, mazel tov. That’s the other side of the coin to all of this,  companies need to be promoted. It’s like any other business, marketing and PR works, or else these companies wouldn’t spend hundreds of thousands or millions of dollars to get the word out. I’m going to get shaman-y here, it’s all about the intention behind the messaging. Getting paid by a company to promote them is great, again, mazel tov.

There are legit promoters and marketers around, it sometimes takes skill to spot. If you see a company slowly and steadily releasing news and climbing the charts to a much higher share price, there is a chance that they are doing things in an ethical way. Always read disclosure statements and privacy policies closely, the smaller the print, the more important the information.

Stay safe out there.