The Fountain of Youth: Available Now

You might think of this as my "garbage stock" post of the week: Phyto Labs.

This morning I got spam from StreetInsider.com, a source of some of the most hilarious garbage stock pitches you'll ever see. The pitch here: sell your Merck and buy Phyto Labs.

And why not? According to its website, Phyto Crap has "been able to begin turning the tide of the disastrous health situation of the north American population." And its stock is going from a buck to $10! Get your "anti-aging doses" now!

What utter bullshit.

Some points of order for identifying garbage stocks:

• You hear about it from spam.



• The company posts press releases about mundane developments.



• The company posts a press release announcing the hiring of a public relations firm to tout its stock.



• Claims are outrageous and/or idiotic.



• It tries to get you to exchange a legitimate investment for garbage.



• The spam is made to look like research of some sort.



• The promised return--900% in this case--is outrageous.



• The company or its promoter is based in Texas or Florida (this promoter's in Plano, TX, a notorious hive of con artists).



• Seemingly sincere discussion of the stock on bulletin boards. All that dialog is a drama designed to get your attention. It's produced by scripted touters and bashers.

The lure of easy money is always at the bottom of these things, be it stock promotion or Ponzi schemes. The art is in making the unbelievable return seem believable just long enough to harvest the suckers' assets.

If you received spam solicitation for garbage stocks, be sure to forward it to spam@nasd.com. It only takes a second, and you could actually help someone else down the line avoid getting screwed.

Image from here.