Sshhh....a hot tip for you!

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Word has leaked that a major discovery has been made and will soon be
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Get in early on February, 15th and win with KRXR.

I received the above e-mail today from a well-meaning fellow investor who I have never met - bless his soul - who really wants me to be rich....NOT!

Such emails are the modern-day equivalent of the boiler room tips pitched over the phone by unscrupulous traders just itching to churn their clients' accounts. This is a company, whose stock did not even exist before Feb. 1, 2007! As soon as it became public, what's a small unknown company to do to attract interest from investors? Hire marketing companies to pitch their stock. Who falls for this pitch? People who are always looking for the next big thing to make them rich! When the stock rallies as more and more people buy (remember The Greater Fool Theory?), the founders and original investors cash out, leaving the rest with nothing.

The pitch is usually more polished than the above. It often involves comparisons with a large company stock (like Wal*Mart or Microsoft) saying that 20 years ago, these stocks were unknown just like this one. Now, who doesn't want in on the next Microsoft?

As a FinGho Walker, I hope you never invest in individual stocks. Even if you want to dabble in it with your play-money, there is a starting point to begin your analysis on which stock to buy. There are several other important rules to consider when picking stocks (which is a loser's game, in my opinion) but this is a good place as any to start: Place less faith on companies that pitch their stocks rather than pitching their products. A company can survive and prosper only by selling products or services, not their own stock!

If you ever receive mails like these, I hope you do what I do. Hit the delete button faster than a kid running towards a candy store. Why? Such marketing pitches violate the first two rules of RV's Four Axioms on money. Or better than deleting them, hit the "Report as Spam" button if your email provider has this option, and let them deal with it. The problem is, such e-mails come from all sorts of weird places and easily changeable email IDs that it is near impossible to track down these spammers.

Walk safely, my friend.