The Poop on Pink Sheets

We’ve all received them. Faxes, e-mails, mysterious letters from companies offering “can’t miss” and “undervalued” opportunities for penny stocks and telling us their prices have no where to go but up. (Although pink sheet stocks are also sometimes called penny stocks, they are usually priced somewhere just under a dollar.)

Well, I had the good fortune recently to run across a blog that offers a website that accepted the challenge. A website called Spam Stock Tracker www.spamstocktracker.com “purchased” 1000 shares of stocks based on information received as part of spam e-mails. The results may or may not surprise you -- from companies that “have no where to go but up.” Here’s a summary of what happened during Spam Stock Trader’s fictitious purchase:

Total Cash Outlay:       $17,405.00
Total Current Value:     $10,301.40

Net Profit:                - ($7,103.60)

Pennies indeed!

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Meyerowitz Investment Management announces Managed
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Minimum investment: $50,000. Your investment is not pooled with other investors.

or more information, please contact Mark Meyerowitz, at 973-669-8393 or mark@investwithmark.com

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Greed Hits the Mailbox

Nearly every investor receives them in the mail: slick and usually colorful PR pieces, disguised as investment research, which are really nothing more than promoters out to convince you to buy their stock “on the ground floor.”

Many promotions offer unrealistic gains in very short amounts of time to entice the reader to continue reading. Some suggest “if the idea of turning $1,000 into $11,200 appeals to you, read this report.” Others claim “we believe this $10,000 investment in (for example, XYZ oil) will be worth $30,000 this year alone, and could grow to over $100,000 within the next 2 to 3 years.”

Clearly these suggestions of great riches are not made by legitimate investment advisors. Unfortunately, this sneaky and misleading gimmick causes many eager investors to invest in nearly worthless securities.

If you are bitten by the bug of quick profits, here are a few tips that could save you from a bad investment.

• First, understand the motive of the mailing piece. Many mailing pieces are motivated by the need to pump up the stock price so that someone could sell their shares at a better price.

• Secondly, do your homework. Don’t take the mailing pieces claims as true. This is exactly what they want you to do. Don’t trust investment research from an unknown source. Do your own research. There are many online sources of information that you should check. If you use an online broker, you may be able to type in the stock symbol and pull up financial information, recent news, press releases, and government filings of the company (called 10q or 10k). Read the government filings first. These have the best chance of being truthful about the company’s activities. You may find that the vast oil resources the mailer claims do not exist. Sometimes the company in question has no proven reserves and no cash to find reserves. No matter the industry, companies need cash to develop product and to operate.

• Next, check out a price chart of the stock. If the price plunged, there is most likely a good reason for that to have happened. If the price is increasing at a rapid rate, it could be a result of the hype generated by the mail piece. You may want to give the stock a few weeks or months to calm down from the recent promotion before you buy.

If you find that you still want to own the stock, go slowly. Everyone knows that investing takes time. Protect yourself. Never plunk down an amount of money that you cannot afford to lose entirely. Your initial purchase should be a small percentage of the overall amount you want to invest. If the stock performs well, you could always buy a little more. If the stock turns into a loser, stop. Don’t buy more. “Penny” stocks can quickly become worthless.

Finally, analyze your actions. Are you taking a businesslike approach to your investment or are you letting your emotions, particularly greed, determine your actions?

Those who invest too quickly or by greed are prone to making blind decisions and tend to panic when the market turns against them. When it comes to investing, leave your emotions somewhere else. Stay calm, be analytical, and don’t believe all the nonsense and rumors that come your way.

In the end, promoters are paid to create what seems to be a great investment opportunity that falls directly into your lap. Just keep in mind that there are many good investment opportunities out there, but they don’t usually come knocking on your door, especially not with vibrant colors and outrageous claims. Think about it: If these companies were this good, they wouldn’t need to create wild and misleading claims to get your attention. The best advice may be some of the oldest – If it sounds too good to be true, it probably is. Protect yourself by researching claims. We work hard to earn our money. There are many legitimate, solid growing companies with proven track records of success for you to invest in. You really don’t need the risks associated with dubious penny stocks to make money.

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Did you know...

Mark Meyerowitz and Meyerowitz Investment Management has recently been admitted into The Paladin Registry?

PRESS RELEASE

FOR IMMEDIATE RELEASE MAY 25, 2005:

Mark Meyerowitz and Meyerowitz Investment Management (MIM) Admitted to the Paladin Registry

Sacramento, CA (May 25, 2005) Paladin announced that Mark Meyerowitz and Meyerowitz Investment Management (MIM) has been awarded a five star rating and been admitted to the Paladin Registry (www.paladinregistry.com).

The Registry is an online service that documents and validates the credentials of high quality financial professionals who rank in the top 10% of their profession. Investors use this free service to find, evaluate, and select advisors who have the knowledge and ethics to help them achieve their financial goals.

Jack Waymire, Paladin founder and author of Who's Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor said this website solves three major problems for investors who rely on financial professionals. "First, advisors don’t have documented track records. They compete with credentials, when they have them, and sales skills when they don’t. Because individuals don’t want sales reps investing their assets, they need a way to select advisors with the best credentials. Second, investors have trouble finding competent professionals they can trust. Advisors who call them are usually sales reps and the professionals who have the knowledge to help them do very limited marketing. Third, it’s not enough for investors to find someone they hope is an expert. They need proof the advisors are every bit as good as they say they are. That’s what the Registry does. It documents the credentials and integrity of advisors, then validates the documentation with a rating."

Waymire acknowledged that Paladin admittance requirements are designed to exclude bad advisors. His company's independent documentation of advisor credentials and integrity reduces the number even further. The result is a directory of high quality professionals that’s the first to provide the following combination of services:

• High admittance standards that protect investors from bad advisors
• A quality rating for each advisor that validates competence, integrity and risk of bad advice
• Online access to documentation for professional credentials
• Full disclosure for compliance records, compensation, investment expenses, and potential conflicts of interest
• Advisor agreements that put investor interests first

About Paladin Registry, LLC
Paladin is an information services company that provides free profiles, ratings, and education services over the Internet to investors who rely on investment advisors to achieve their financial goals. Paladin services help investors avoid bad advisors and select competent, trustworthy professionals who provide high quality wealth management services. Visit our website at www.paladinregistry.com for additional information.

About Mark Meyerowitz
Mark Meyerowitz, the President and Founder of Meyerowitz Investment Management (MIM), has over 30 years of investment experience. Mr. Meyerowitz, formerly a Financial Consultant for Smith Barney and Edward Jones, is the President and Founder of Meyerowitz Investment Management (MIM) a Registered Investment Advisor located in West Orange, NJ. In addition to providing financial, education, retirement and tax planning services, MIM provides advice in investment and tax strategies while maintaining a close, discretionary relationship with each client. Investment management services include securities, mutual funds and exchange traded funds as well as project services, small business and 401k counseling. MIM, located in West Orange, New Jersey, is not a brokerage firm and does not have custody over clients' money. Instead, it actively manages accounts through Ameritrade and is fee-based. Find out more about Meyerowitz Investment Management at www.investwithmark.com.

FOR MORE INFORMATION ABOUT PALADIN, CONTACT:
Mike Szimanski
202.558.8005
mike@buzzroad.com

FOR MORE INFORMATION ABOUT MARK MEYEROWITZ, CONTACT:
Meyerowitz Investment Management
973-669-8393
mark@investwithmark.com

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