The Newsletter Path to Riches

Let's say XXX is a "penny stock"promoted for the day. Promoted by online penny stock newsletter writers. Xxx went up from 1.12 to 1.46 in one day, because of the hype. If you invested $10,000 in Xxx on Monday, it would be worth over $13,035.71 on Tuesday. On Wednesday it went down again. Where is that money from small-time investors going?

Apparently, this speculation is raising money in $500,000 increments, for the man who is Xxx, a professional, who offers services to companies, as a company on the Over the Counter market; it's not clear that there is any more than one man in the company, but he's raised millions this way.

What kinds of services does this one-man company offer: contract advice with other companies, advising and facilitating offshore contracting, "to lower your costs," technology licensing and acquisitions of other companies, i.e. mergers.

Will Xxx rise tomorrow? One of the more revealing statements I've read on these penny newsletter sites is: "It rose to .01 before it fell back to .001, but it's set to rise even further this time."

What's going on here? I've been dabbling in this field for six months, even investing in some of the weightier "penny stocks" promoted; so far I've only lost a few hundred bucks. None of the stocks promoted have gained a dime; one has lost 77% of its value, another 47%. I did not invest in Xxx, but the second loser was a Chinese stock that collapsed when its CEO was caught fiddling the books. I didn't get the news--about the CEO--until too late.

I also invested in a silver mine, but right now, while silver goes through the roof, the mine shares lost 90 cents!

This is a game. The only people who win are either full-time gamblers (they call themselves day traders), or entrepreneurs who manipulate the market to raise money for themselves--or their companies.

But that's the point, isn’t it? They raise money for business enterprises. Small-time investors rush in to strike it rich with the next Microsoft, Google, or Facebook. It's the gamblers who make money on the boobs buying penny stocks to make their fortunes. The gamblers do play a role: they provide incentives to the hungry public, drawing in millions, billions of dollars from small-time investors, who are easily gulled.

But how else do you get rich when the producers of anything tangible, the actual producers, get little more than subsistence? "If the poor don't like being poor, then why don't they get rich?" asked a student in one of my classes. By investing in speculative stocks? It brings money out of the proverbial mattresses, into the hands of entrepreneurs, fiddling CEO's and speculators.

This is Late Capitalism; it's like the 'Late Roman Empire,' where all the gold flowed upward, into the hands of the predatory few.