This afternoon I had a lull in the action. Like millions of others I popped onto FaceBook to catch up with the comings and goings of 600 of my closest friends. Pffftt. Within seconds I saw the following ad. I have blocked out the company / website / promoter as to not draw any more attention. I’m not even sure how this is legal and no, I’m not talking about the content but rather the promotion of investment. Let’s understand what is happening here.

Someone has gone ahead and loaded up on a tremendous amount of a penny stock that more than likely has a small float and little to no coverage. Even worse, and I didn’t even click to find out, this stock more than likely is traded on a bulletin board rather than one of the more reputable exchanges such as the NASDAQ, NYSE or AMEX. There goal is to then promote the stock to others looking for a quick profit on the buying of unsuspecting folks following the advice of the promoter.

Here’s the deal. Stock promotion or ‘hot tips’ have been around as long as stock speculation itself. At the turn of the century folks would promote stock through the bucket shops to try and drive up or down the price for quick profits and over the years it evolved from phone calls to random fax pages, email blasts and now FaceBook ads.

Please don’t fall victim to this as it is not legitimate investment idea. In fact, it is precisely this type of activity which gives this profession such a bad name and is what drives me absolutely nuts about this business. Whenever someone tells you they have ‘a sure thing’ please do two things. Check your pockets and run the other way.