Unfortunately, some people on the other side of the pump are completely full of *#?**#! (pardon my French). Remember, anybody who's selling or promoting a tool that guarantees returns would be sitting on a yacht somewhere, contemplating buying a Caribbean island if he truly possessed such a device. He wouldn't be talking or writing to you (no offense)!

Pyramid schemes are among the older tricks in the book. I can picture someone in the arid floodplains of Mesopotamia offering each subsequent neighbor a little more grain tomorrow for lots of grain today. Separating a fool and his money is still a favorite, and dangerous, pastime of the sadistically cunning - just look at all the civil unrest and violence caused by a couple of Ponzi schemes in Albania.

As the Reluctant Investor, it's my job to point out the good, the bad, and the ugly of the Internet. Well, some of the bad turns out to be fairly ugly, and some of the ugly is so bad it's comical. Here's a heads up on four types of pump and dump factories.

Sponsored Stock Tips

• Stock Genie: The Stock Genie has become an icon of Web foolishness. Magic Moe, a poor man's version of Aladdin's Genie, greets you at the front door hawking the stock of the month. They provide investors with information about companies they "feel are undervalued in the current market and can double or triple over the next six to twelve months." [source:Magic Moe] In the finer print, the (Internet) Genie also takes payments in various forms from the same stocks it promotes. Hmmm...
  
  

Do you take candy from a stranger?

• There are several good reasons why you shouldn't take candy from strangers. You never know what you're going to get, and what you do get can fall in that bad to dangerous range. As you get older and can buy your own candy, the same reasons apply to investment advice from strangers. Marke Traders began a major advertising/PR campaign by promoting "Free Stock Tips". The tips come from fellow investors, not Peter Lynch.
  
  

Watch those sheep

• The wolves often come in sheep's clothing. Reuters reports that International Automated Systems' (OTC BB:IAUS) stock price soared over 1,000% following its disclosure of a major technological development. The development never materialized and the stock's price sank to its original level - but only after the chairman and his children sold over $3 million worth of stock. Over The Counter stocks are subject to fewer restrictions and reporting details, and thus are also potentially subject to more fraudulent practices.
  
  

Tips in a booth

• Last week I received an invitation to an investment show that claims to be America's #1 Place for Actionable Investment Advice. It's a conglomeration of booths filled with allegedly profitable investment ideas - coming soon to a convention center near you. Most of the investment ideas are valid and the shows can be great places for researching your ideas. Just remember, silver mines and bridges usually sound and look better in a display than they do on a balance sheet.
  
  

If you do see something fishy or get snared by a pumper's net, you can seek redress with the SEC.

The Internet has created a bounty of information heretofore unavailable to retail investors. Just be careful where you fill up and remember two things: 1) read the fine print and 2) know who and what you're dealing with.

Do you have a time or money saving idea that wasn't included in this article? Please send it to tips @stretcher.com. We get the best ideas from our readers!

If you liked this article sign up for our free eNewsletter Surviving Tough Times Do it today and we'll give you our ebook featuring over 200 ways to save on groceries (a $19.95 value).

Follow The Dollar Stretcher on Twitter.

I Would like to:

• Read other articles on this topic
  
• See what else is in this issue
  
• Subscribe to "The Dollar Stretcher" free weekly email newsletter
  
• visit the Problem Solving Center
  
• visit the Reference Library
  
• browse the 'author' index
  
• search 'by date' index
  
• check out Past Issues of Newsletter
  
• go see 'What's New'
  
• "Can You Help This Reader?"
  
• drop by 'Tips, Quips & Quotes'
  
• send email to the Editor of "The Dollar Stretcher"