September 1, 2009

IVWT Investing Rule #1: If You Have to Advertise...

...it's not worth a buy. Case in point: I occasionally get mailings touting the latest "hot stock" opportunity. The cover proclaims "DISCOVER A STOCK THAT CAN RISE 2,000% OR MORE" and gives you the stock symbol.

This is the classic pump and dump: Talk up a low-volume OTC stock with terrible fundamentals, using a slick newsletter-type brochure, then sell to the suckers buying in.

So Rule #1: No great value stock needs advertising. Intrinsic value is more compelling than slick marketing.

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