CANNAINVESTOR Magazine February / March 2017 - Page 44

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CASE STUDY 2 – WON’T GET FOOLED AGAIN

The prepared Retail Investor has access to the resources, tools, and methods/tactics needed to make informed and profitable decisions for investing in publicly traded cannabis and hemp companies. All of which can be found in the current, past, and future issues of CANNAINVESTOR Magazine. This month, task yourself to identify the weeds in the garden! The December issue focused on how unscrupulous investors use bulletin boards to manipulate Retail Investors. Game Theory and Probability, Psychology, and Technical Analysis are all used to try to manipulate Retail Investors and that in turn manipulates the share volumes and prices. There are other tactics used to manipulate the Retail Investor.

We are all exposed to the write ups praising companies written by paid stock promoters. There is often value in subscribing to the promotional newsletters as there is often content about new companies or companies that were previously dismissed plus updates on their existing clients. But have you ever asked yourself what happens when companies do not agree to pay for the services of stock promoters? When comments by these promoters are negative the comments may appear to be exaggerated or unfounded once investigated further. The industry is still often referred to as the “Wild West”. An expert source of that era (www.legendsofamerica.com) noted that lawmen from that period sometimes used “their badges in establishing protection rackets or other crimes”. I need to point out that in no way am I discrediting legitimate paid stock promoters as they offer an invaluable service in getting much needed value added information out to Retail Investors. However, when some become sour on companies, almost with zeal and passion, one must at least question the motive and verify the assertions. A good source to identify such manipulation, in addition to the December article, is: http://www.extraordinaryinvestor.com/penny-stock-scam.html that plainly states “bashing is not illegal if the bashing does not spread clearly false information about the company. That's free speech and freedom of the press to report news, even if it is one-sided”. This is done by focusing on aspects of company’s unsystematic risk that may be open to interpretation. Rarely do they comment on the systematic risk since that risk likely also applies to their paid clients.

Misleading websites are another tool in the arsenal of the unscrupulous. How many times have you navigated to what you thought was a legitimate website only to find out that it was not? Those running these sites, including social media pages, are hoping to capitalize on a well-respected brand name or similar domain address but at the end of the day it is just another form of manipulating Retail Investors and others through deceit. The use of identical or confusingly similar names is passively purporting to be the “real McCoy” because it is the victim who often concludes on their own that they navigated to where they had intended - much like a Venus Fly Trap, the victims come on their own free will.