In times of about market peak, furthermore if there is a bubble and about when the bubble is going to burst, scams appeared in market because of the increased interest of the inexperienced crowd, can find more easily victims.
The scams are of two basic kinds:
1. Those that “offer” the bait of nice (big) returns, some times guaranted, in the field of investment management, trying to attract naive investors.
2. Or the scams are the executives and major share holders of some listed companies, more often from small cap category (but they can be, even from big cap ; see Enron). Those scams spread fake rumors about the growth prospect of their companies, sometimes they cook the books, the balance sheet, income statements etc. The naive crowd buys on these fake rumors, while those cunnings, they sell their shares in high levels, much higher than what the real value and real growth prospect of the company (and if it has at all…), justifies. Of course after a while, the stock drops, collapses and the naive crowd is “underwater” with big losses and no chance to recover.
Be suspicious. Especially with whatever seems very attractive, too nice to be real.
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Through this, you can obtain 25 years on market experience that I have as investor.
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Reviews (on amazon) are welcomed
Thank you,
Panayotis
