In the video above Timothy Sykes does an excellent job describing how to spot a stock scam from a legitimate investment opportunity. As Timothy explains, there approximately 8500 of these “scam stocks” trading on the OTC Bulletin Board that utilize “pump and dump” strategies to drive the share price of their stock up.

Please note that the marketing tactics of these companies may be overly aggressive, but for the well-informed investor, trading these types of stocks can be lucrative if you know what to look for. As Tim further describes, he has no qualms investing in what he considers horrible companies, but plays the odds when noticing a penny stock jump from 100-200%.

One must always take into consideration that the hot penny stock that was just recommended was most likely aimed at individuals who are susceptible to impulsive buying tendencies based on reading “jazzed up” marketing materials. Those individuals have not done their due diligence and read the fine print contained in the marketing materials. Other times, a chop shop will pump a promoted stock to prospective clients to raise the share price on sparsely traded penny stocks over the telephone.

Always remember that a stock being promoted (by e-mail, message boards, cold calling) is not putting money back into the company, research and development, staff augmentation, mergers and acquisitions, etc. The independent marketing firms pumping these stocks are making out like bandits! Always do your research before moving forward with a “marketed” investment.

Kind Regards,

Nicky Papers

Who would have thought dialing for dollars could be so much fun? For pennies on the dollar you could buy thousands of leads in select states and set parameters of your choosing.

To make money “chop shop” style you will need the following:

1. A telephone blocking the number on outbound calls.
2. Thick Skin
3. Male Leads (We don’t pitch the bitch.)
4. Puma Jumpsuit.

Welcome to Cold Calling 101. The sample lead above, (rendered to protect identity) is a fair representation as to how a boiler room works and the mentality of the brokers behind the high-energy phone calls. Everyday thousands of Americans are harassed at work by money-hungry brokers hopped-up on a mix of high testosterone, Red Bull, and Ritalin. For Nicky Papers, (yours truly!) it was a combination of all of the above on typical office afternoon.

So what are the “sharks” looking for exactly?

Currently working with Brokers: A prospect who works with multiple brokers shows that he’s not completely committed to anybody and will cut a check if he likes an idea. (He’s done this before…) Be wary of guys who use online brokerages as they don’t see the need in being told what to do. For prospects that have brokers out of state, (especially in NY) it’s a clear indicator that they are receptive to doing business completely over the phone.

Owns Stock: Prospects that trade common stock are our type of guys! We are looking for liquidity and a gamblers mentality. At this time, if they’ve made some money on a stock they’ll share the ticker with you. On the sample lead the prospect was kind enough to tell us that (NASDAQ: SLAB) Silicon Laboratories took the prize as he doubled his money on it. Reference something similar on the next call to open the account.

Ballpark Portfolio Size: So, how much are you playing with in the market? We were looking for guys with over 100k in the market. In pursuit of gaining a piece of that portfolio, anything over 100k is a safe number to weed out the piker’s from the players. In this case, our prospect is playing with 900k. “A fucking whale baby!”

Personal Info: After capturing the aforementioned “meat and potatoes”, now it’s time to bullshit a little. So are you still making six-figures? (Of course.) What do you like to do in your spare time? Still chasing the ladies? At this time the victim will lighten up and tell you some tales of adventure and romance. Our prospect (above) enjoyed fishing for trout. (How exciting!) It’s not much, but valuable enough to pull out your ass on the next phone call.

This prospect turned into a slippery eel and got away on the follow-up call. Now don’t think I was the Michael Jordan of cold-calling, but for being 21 years old I was pretty ferocious. With a solid 5%-in, 5%-out game plan in place, the broker’s always on top. And if the stock actually went up, more power to them!

It’s hard to pinpoint the catalyst that caused markets to plummet, the exposure of unethical practices in the financial world, and the credit crisis that we are in today. Is it because working in financial services (in many instances) had become too profitable or is it because Americans (as consumers) are weak and gravitate toward exotic s equities trades (from a hotshot broker in New York!) and complicated mortgages structured by now defunct banks. Asking a question like that is like asking what came first, the chicken or the egg?

One of my favorite movies of all-time is Boiler Room, as it shows an accurate representation of chop shop culture and the attitudes/behavior of many brokers on a trading floor. For me, Boiler Room glamorized the business and influenced me toward working within the financial services industry.

When I was 21, I responded to a Craigslist ad to become sponsored by a “retail equities brokerage” where I would learn the business through cold calling and studying for my Series 7. The opportunity seemed like it would pay dividends down the road so I kindly accepted the offer.

In just a few months working at this firm I observed the following:

1. I was becoming an animal on the phone. Being trained by sharks caused me to be relentless and not take “no” for an answer.

2. There was no dress coded or sense of office etiquette. Most of us, (myself included) rocked the classic head-to-toe Puma jumpsuit. (Typical guinea shit.) We had dice games in the conference room after the markets closed.

3. There were no analysts at the firm. Brokers pitched what they liked or stocks with preexisting “call scripts”. There was one speculative stock (Telkonet) that was pitched harder than anything else. It’s ticker symbol (TKO) opened up more accounts on a first trade basis than more commonly known stocks, because it’s ticker sounded “cool”.

4. Everything I did was fake. I used a fake name. I pretended I was a senior broker. I held conversations in topics I knew nothing about. (Fishing and hunting?) I told prospects I would call them back “later on down the road”, in-turn I passing them off to a British guy (heavy accent) where he’d read my notes and open the account. The client was none-the-wiser.

I never ended up passing my Series 7 exam. The firm tried selling me on reasons I should keep studying and “dialing for dollars”. Frankly, I was sick of being an actor on the telephone getting leads for someone else. I ended up parting ways with the firm on good terms. As a former “chop shopper”, where would I go next? For me that was an easy decision, I became a mortgage broker.

I’ve always been a fan of the underdog. Six Flags Inc. has been in the dog house for the past ten years. If it’s not someone dying at one of their parks, it’ll be stock speculator getting crushed on hopes that “this will be the season”. Do you think 2.3 billion dollars in debt is going to stop them? No sir, they just need more customers!

I do applaud Six Flags for their strategic partnership with Coca-Cola. Using their “buy one get one admission” promo saved my ass money every time I’ve gone. If you forgot the bottle/can, no problem! Just use a vending machine outside the front gates. Make sure you chug that shit before you get in. Remember, no “outside” containers.

When most companies are headed for the shitter, they’ll cut back on expenses. Six Flags on the hand spent more dough on new roller coasters (Kinda Ka?), more “danger” signs, and new marketing campaigns.

Speaking of marketing campaigns, the “Six Flags - More Flags! More Fun!” tops all. I found “Mr. Six” (old man who busts a move to Vengaboys - “We Like To Party” )to be weirdly amusing, but the Asian dude in 2008’s campaign takes the prize.

Just when you thought Six Flags was about to throw in the towel, they went down swinging and pulled the “funny racism” card that called for an off-the-boat Asian guy to be their new mascot. Forget about racism, I still listen closely to the TV because I know they are making him say, “More Fags, More Fun!” Six Flags really has some balls airing these commercials. I wonder how Asian people feel? I wonder how homosexuals feel?

In pursuit of increasing revenues they should put a comedic spin on all the recent accidents/deaths at their parks. They should bring back the old “I survived…” t-shirts. They could sell them at kiosks at each attractions exit and souvenir shop.

I know it’s virtually impossible, but I hope that one day these guys will churn a profit. I’m still rooting for the underdog. I’d love to see their management on CNBC with their “I Survived Bankruptcy!” tees on, their middle fingers up in the air, and their mascots parading around. That will be the day. Until then, just give me new commercials and I’m a happy camper.

Keep up the good work guys!