Sunday, October 22, 2006

Stock Picking Service - Internet Influence?

I got a request from someone to help them market a stock picking web site. I am not yet completely sure what it is and how he makes his money. He sells a newsletter on one site and gives it away free on another site.

While researching the customer I found that there are a bunch of spam like stock postings with some apparently somewhat useful information but I am not quite sure yet if it is clearly spam or just a feeble attempt at marketing.

Then I notice this other guy's name all over related to the guy who made me the request. So I go check out the other guy's web site and he's got this video of himself and a clearly used-car salesman looking site guaranteeing people they will make money using his stock analysis / picking service.

So I start to ponder whether these guys are legit or not and then it hits me. The first guy wants me to get people to sign up for his free newsletter at 1000 people per day. In one month that would be 30,000 people.

If he says "buy this stock" and 30,000 people buy the stock - what effect will that have on that particular stock? If he says sell....

I am not sure exactly how many people it would take to influence a stock but the thought is somewhat interesting. L. Ron Hubbard, founder of Scientology and author of Dianetics, was quoted as saying "if you want to make a little money, write a book. If you want to make a lot of money - create a religion" (according to my professor of comparative religion in college). I found a reference to the statement here. That always fascinated me - that he said it, did it- and people still follow this religion even though his motivations are blatant.

The same principle kind of applies here. If you can get thousands or even millions of people to believe you have magical stock picking ability and some incredible "magical" software that helps you pick stock - and then you tell all your believers to go buy or sell something - you may be able to influence the market. And guess what. You believe in yourself too in that case...Because you know what will happen when you say "go".