The Bull Hunters Guide

Investment scams aren’t limited to the fast paced interaction of bulletin boards, of course. Newsletters are another popular way to scam unsuspecting investors who are looking for a valuable tip on where to put their money next.

Newsletters Can Be A Scam

There are a lot of stock pick sites out there. Not surprisingly, each one claims to have the best strategy or formula when it comes to picking stocks. One of the most popular features of these sites is that they offer periodic newsletters, sometimes as often as one a day.

Some of these newsletters are legitimate, and actually offer the unbiased market advice that they claim to offer. However, just as many or even more of them are written by companies under the guise of a third party pseudonym to boost and promote their own stock!

Obviously, this can lead to all sorts of trouble. A legitimate company that was doing well in the marketplace through honest means would have very little reason to artificially inflate the value of their stock through disseminating disinformation in a newsletter. Any company with a future would also be wise enough to realize that this tactic is only setting themselves up for failure in the future.

In addition to the artificial inflation by paid companies, newsletters are also a popular place to run the pump and dump scam, offering what looks like a valuable tip, but is actually intended to ruin the investors who are duped into acting on it.

Newsletter Advice Things To Check

When you get an online newsletter that offers what looks like good advice, make sure of a few things. First, ensure that you actually subscribed to this newsletter. If it comes from an unknown source, you should delete it immediately, because it’s certain to be spam, and therefore certain to be a scam or at least a terrible waste of time.

Secondly, make sure that the newsletter you subscribed to accurately discloses who paid them to write it, how much they were paid, etc. Federal law requires this, so those newsletters who skirt around it are probably looking to hide something.

Lastly, proper grammar is critical. A professional newsletter might have a single typo, but it definitely won’t be full of misspelled words, use all capital letters, or endless streams of exclamation points.

See you next time when we talk about actual investment fraud.

See you next week for part 5 of Investment Scams.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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Up until now in this blog, we’ve mostly been talking about different strategies that you can put to use to make yourself a more versatile trader. This is all well and good, but all the strategies in the world won’t do you any good if you’re so unfortunate as to fall victim to an investment scam.

Scams Are Everywhere

These types of scams are, unfortunately, all over the place. No matter how savvy you think you might be about this sort of thing, some of the scams are quite sophisticated and easy to fall for unless you know exactly what you’re looking for.

To those ends, we’re going to spend the next several entries here going over many different types of investment scams and how to keep an eye out for them. It pays to know the enemy, right?

Internet Is Popular For Scams

It should comes as no surprise when we say that the majority of the investment scams going around are perpetrated on the internet. The nature of the internet allows for a great deal of “safety” and anonymity for thieves and con artists, so it makes a popular venue for taking advantage of the unwary.

No doubt you’ve seen at least one type of scam already, if you’ve spent any time at all looking at investing online, or joined any investment discussion sites. This is the email spam scam, wherein someone invites you to take part in his or her brand new scheme for making “guaranteed” investments. They use a lot of hyperbolic language touting their new system and claim that they’ll let you in on their amazing secrets for just a few hundred dollars.

Of course these types of scams are quite transparent, but believe us when we say that they get a lot more sophisticated than this. We’ll begin our discussion next time with an overview of the different types of scams out there.

See you next week for part 2 of Investment Scams.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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Over the last several entries in this blog, our topic of focus has been short selling. We’ve covered what short selling is, when it might be useful to you as an investor, how to conduct the transaction. We also discussed what risks are involved in the trade, and the lengths that some individuals go to in order to use short selling in a dastardly and destructive manner that goes a long way towards earning it a terrible reputation. In this entry, we’re going to do a brief review of what we’ve discussed in order to put a capstone on the short selling subject once and for all before we move on to a new topic next time.

Summing Up Short Selling

To reiterate, short selling is when one investor sells shares that he or she does not actually own, on the agreement that he or she will actually buy the shares at a later date. They make money on the transaction if the value of the stock falls in the interim, enabling them to buy it at a lower price than they sold it for. Of course, when the shorted share actually increases in value, the short seller loses money.

That means that short selling is a very high-risk transaction. On the one hand, the value of a stock can’t go below zero, so the amount that you stand to earn is limited, but there is no ceiling to how high the value of the stock can rise, so the amount you could lose on the transaction is theoretically limitless.

Many people consider short selling to be a dishonest or unethical approach to investing because of the necessity of “voting against the home team” that comes with it. Despite the criticisms, however, short selling is definitely here to stay, so it pays to know all that you can about it. In doing so, you can add it to your stable of strategies and use it in a responsible way that brings value to your portfolio.

Thank you for joining me for Short Selling you next time when we begin an all new discussion.

See you next week for part 1 of Investment Scams.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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Lately in this blog, we’ve been talking a lot about stock picking strategies. When you get right down to it, the whole essence of investing in the stock market boils down to being able to pick the right stocks at the right time. This is largely a matter based on “luck”, but that doesn’t stop people from trying to devise systems to make it more comprehensible and certain. And some of those systems, as we’ve seen, actually do make a lot of sense.

Handling Your Investments

Starting with this entry, though, we’re going to shift gears a little bit. We’re going to begin taking a more in-depth look at topics related to how to handle your investments once you’ve actually identified the stocks that you care to put your hard-earned money into.

The first of these techniques that we’re going to explore is known as short-selling. If you’ve been investing for a while, then there were probably a few occasions on which you just knew that a stock was about to collapse under its own weight. Maybe you wondered if it was possible to profit off of a situation like that, increasing the value of your portfolio substantially, even during a bear market?

Short Selling Is The Answer

Well, it’s entirely possible. What’s more, it’s something that is done every single day on the market by confident traders who know how to make the most of a “bad” situation. What makes it possible is short-selling.

Short selling works almost the complete opposite of a typical investment. When most people buy stocks, they try to buy at a low price, and then hold onto their investments as their value grows over a period of time. Once the value has risen, they sell their investments (hopefully for a profit). Short selling, however, is when your purchased stock earns you money only when its value goes DOWN!

How does it all work? We’ll take an in-depth look next time.

See you next week for part 2 of Short Selling.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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Hey there. Welcome once again to our series of posts covering some of the most popular and effective methods for selecting stocks. These methods have been documented and compiled over the years, and while they differ dramatically in terms of execution and philosophy, they all share the common element that, depending on who you ask, they work!

While every stock selection is something of a gamble, it’s our hope that by looking at these time-tested strategies, you’ll begin to gleam some idea from them of how winning stocks are usually chosen, and begin to develop your own strategy that will be effective for you.

Beating The Dow

Today, we’re going to look at what is probably one of the simplest methods in all of investing. This method was first presented in a book by Michael Higgins called “Beating the Dow”, and is commonly known as the “Dogs of the Dow” method. Selecting stocks by this method couldn’t be easier. You simply take a look at the top 30 companies with the highest dividend yields, according to the Dow Jones Industrial Average, and then spread your portfolio among the top ten.

That’s really all there is to it. You just check back every so often, perhaps every quarter, and make changes based on what you see, so that your portfolio always accurately reflects the top ten dividend yield stocks at any given time.

Depending On The Dividends

Clearly, this strategy is depending highly on the dividends that you’ll receive from the stocks in question, but it always takes into consideration the future potential of those stocks. The idea is basically that, if a stock is in the Dow top 30, it will typically be a strong stock with enough of a foundation to weather passing storms and eventually return to a position of prominence, whereupon you can sell it for an amazing profit. In the meantime, you just enjoy those dividend yields.

Well, that’s it for now. Told you it was a simple method. Next time, we’re going to wrap this series up by taking a look at the last method on our list: technical analysis. Stay tuned!

See you next week for part 10 of Stock Picking Strategies.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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