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Meet The High Schooler Who Made $300K Trading Penny Stocks Under His Desk

Discussion in 'Coffee Shack (Daily News/Economy)' started by searcher, Dec 5, 2014.



  1. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    [h=1]You Know It's A Bubble When...[/h]
    [​IMG]
    Submitted by Tyler Durden on 12/04/2014 21:30 -0500


    [​IMG]Because nothing says rational equity markets like a 16-year-old penny-stock-day-trader who turned $10,000 into $300,000 this year...

    Meet Connor Bruggermann - the new normal 'investor'...



    [​IMG]



    The son of a former vice president at JP Morgan who worked on the floor of the New York Stock Exchange, 16-year-old Connor Bruggermann could well be the poster-child for what the Fed has wrought on the American public.

    As The Verge reports, while his dad warned that with penny stocks "you could make money or lose money very, very quickly," Bruggemann, on the other hand, embraced the chaos. For Bruggemann, as for many others, penny stocks were another outlet for that risky reward seeking. "There is a lot of fraud and manipulation, a lot of them are not legitimate companies," he says. "It could be someone like you or I sitting here saying we have a $5 million deal with Panasonic, when in reality that’s not true." According to the SEC, penny stock scams have surged over the last two years.

    At home, in a room he shares with his older brother, Bruggemann has two monitors set up as a trading station. But most of the time, he tells me, "I prefer to trade on my phone."
    Risk management...?




    "I guess the rule of thumb is, when you invest in a penny stock, expect to lose every dollar you put in. So there is always that risk," he told me. "There have been several times where I put every dollar I’ve had on the line, and fortunately it's worked out almost every time." He stops, then corrects himself. "Every time! Or else I’d have nothing."



    Not everyone sees this as a great success story...




    "There are NO prodigies, just bull markets," says Howard Lindzon, an investor and founder of Stocktwits. He encouraged me not to cover Bruggemann’s story. Other traders I talked to were much harsher. "It's bullshit. Trust me," said one. "This is being orchestrated by a penny stock alerts product; it's a marketing scam."



    But don't worry, you can get in on this too...




    While the promises on Bruggeman’s website are far less aggressive than "Get rich quick" schemes like Sykes', there is an element of self-interest in creating a watch list of penny stocks. "If someone is going to pay me for what I’m trading, I don’t want to get in at a penny and they get in at a penny and a half." Recommending stocks you already own without disclosing that fact is at the heart of many penny stock schemes.

    It’s worth emphasizing here that, while The Verge could find no evidence of Bruggeman pushing penny stocks to his followers in an attempt to pump and dump shares, the basic nature of his website is fraught with that potential. Bruggeman says he is careful to indicate which stocks he is in and alerts followers when he enters and exits a stock. For now, the community following his watch list of stocks is fairly small.

    "We have 16 people it’s emailed out to daily. My Twitter is a little over 1,000. They don’t subscribe to me, but if I tweet, sometimes they will follow my plays."



    But even he is a realist...




    ...and maintains no illusions about the world he’s playing in. "The company I’m in right now, the CEO got arrested for embezzling funds. He stole $185,000 from the Girl Scouts, before this." What he likes about this world is that he is competing against people like himself, mostly small-timers he feels he can beat. "[In] penny stocks, you’re playing against high schoolers. You’re playing Division III."

    ...

    He keeps a copy of Michael Lewis' new book, Flash Boys, on his dresser as a reminder that in their own ways, all markets have their unscrupulous players. Penny stocks are a risky game, he acknowledges, but "there is way more cheating on Wall Street."


    Read more here at The Verge...


    http://www.zerohedge.com/news/2014-12-04/you-know-its-bubble-when
     
  2. Krag

    Krag Planet earth Platinum Bling

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    Have made thousands in minutes with penny stocks as well as the other way around. Not worth the risk and anxiety.

    What they aren't going to run articles on is the criminal, mafia involvement in pump and dump scams as well as how Wall Street crooks even take advantage of the penny stock traders. You reap what you sow and if you are trading air, all you will get in the end is a vaporized life.
     
  3. Charlie Prime

    Charlie Prime Banned

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    It's a lot easier to make money in The Rackets if your father is a Mafia Boss, giving you inside information.
     
    ErrosionOfAccord, Krag and Argentium like this.
  4. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    Pink sheets trading is for insiders and crazy people
     
  5. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    I got caught on the wrong side of this recent oil meltdown. IT's only a portion of my portfolio, but still more than what most people earn in a year. What gets me is I had a beautiful portfolio 2 years ago long in Bershire Hathaway BRK.B Gilead GILD and Short Yen YCS. MAde an easy $25k on the year and another $20k on the others and just gave it all back this month. That portfolio with all of its gains would have been worth this evening $350k doing nothing.

    You can go long right now, just put in stops or hedge. I did not hedge and the specs I bought went down like a rock when Saudi Arabia did not cut production unexpectedly.

    I have BIB biotech ETF, GILD again, BABA, VIPS and going to buy semi conductors ETF, the yen short, Constellation Brands STZ and Berkshire again and not have the worries. I don't need the action, just consistent returns.
     
  6. RealJack

    RealJack Gold Member Gold Chaser

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    I didn't know kids were allowed to play in the stock market? Isn't that kinda like allowing kids to play in the street?
     
  7. Ahillock

    Ahillock A nobody Mother Lode

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    Bubbles. Bubbles everywhere.
     
  8. JayDubya

    JayDubya Gold Chaser Platinum Bling

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    Does anybody else find this story hard to believe? No, not the part about a 16 year old boy trading penny stocks and making a killing. This part:

    "The son of a former vice president at JP Morgan....."

    "At home, in a room he shares with his older brother...
     
  9. Goldhedge

    Goldhedge Modal Operator/Moderator Site Mgr Site Supporter

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    [video=youtube_share;H6SXi4I47Qw]http://youtu.be/H6SXi4I47Qw[/video]
     
  10. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  11. Krag

    Krag Planet earth Platinum Bling

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    But where do people find proper technical analysis on various "investments"? Have you checked out this site specializing in the pink sheet stocks? http://investorshub.advfn.com/

    When I went to Edward Jones I met with one of their investment advisers who was basically worthless in terms of technical analysis even on the blue chip stocks.

    The best investment remains a successful self-employed business. There are no guaranteed investments and much of the "hot tips" are garbage. The insiders rightly get nailed for fraud. And it wasn't the inside trading that got Martha Stewart a jail sentence but lying to federal agents. Crazy? Is anyone who gets caught "crazy"? What is the measure of sound minds when it comes to investments? Successful profits? Mostly those come through dumb luck. The utterly ruthless Jews who have made killings on stocks I guess are sane but they are also the lowest dogs around.
     
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  12. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    The market makers and algorithms have so much capital behind them they can move the market and knock you out with daily volatility if you have stops in place.
     
  13. JayDubya

    JayDubya Gold Chaser Platinum Bling

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    Why can't a former vice president at JP Morgan afford a house where every child has his/her own room? Why does this kid have to share a room with his older brother?

    Apparently it's tough times on Wall Street.
     
  14. arminius

    arminius Gold Member Gold Chaser Site Supporter ++

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    Riiiiighttttt...

    So quickly, throw all your money into the stock market, and make a ton of dough...

    They need us to put all our money in the stocks...

    :sarcasm:
     
  15. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    And stops are exactly how short side manipulators exploit people.

    A bear raid is started (short side sell large block options to start a stampede price drop) then buy in when the flash crash triggers all the stop loss players.

    I personally won't play penny stocks which are the Wild West of manipulation. I prefer to learn everything I can about emerging biotech and follow them closely through the drug release process. It's risky but there are huge upsides for the long term investor. Even though there is manipulation here as well, it doesn't matter to a long investor because the short side players just help provide more.buy on the dip opportunities.

    If the company makes it through the 4 phases of clinical, gets FDA approval, then insurance approval, then consumers like the product, you can be looking at 25-50x gains.

    It's just very important to pick ones with good drug prospects.
     
  16. Krag

    Krag Planet earth Platinum Bling

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    Though drug and military contractor stocks can be very profitable, would you really want to be profiting from those questionable products?
     
  17. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    i don't invest in individual military stocks (impossible to have an index without trace exposure) because I don't want to root for war. Pharma helps people.

    There are two directions the biotech is heading that interest me.

    1) personalized medicine (where chemotherapy for example is tuned to the patient's specific cancer type, rather than a cocktailed broader spectrum approach

    2) improved PK and lowered side effect therapeutics. Some of the drugs out now have poor pharamkinetics but are necessary to sustain the life of people afflicted with various diseases. Pharma is like everything else, good actors and bad actors. Nothing wrong with supporting the ones I feel are working in societies best interests,
     
  18. Krag

    Krag Planet earth Platinum Bling

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    I'm sure there are good companies doing cutting edge research. Which drug companies would you regard as systemically bad for people's health?
     
  19. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    Just my personal opinion...

    I'm cynical toward Novartis' business practices. They have some good drugs but the mark of an ethical company is to fold its hand if it's drug shows sub standard performance, even if approved for sale.

    Recently, Novartis settled for 420 million with the U.S. dept of Justice for giving kickbacks to doctors for prescribing Starlix, a reportedly inferior diabetes drug. There are much better alternatives for patients and this type of alleged behavior makes me steer clear of their activities. People loose limbs, go blind and have heart attacks from this disease and its a life long battle. I'd prefer to the see the patients have an environment where the most effective drug with the least side effects is the one that is prescribed.

    But again, I prefer the start up sized innovators bringing the next generation of medicines to the world, not the whales.
     

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