As you may know, this technique of making some quick money is well-known, and of questionable legality and ethics. However, it's been a technique used by the rich bigwigs on Wall Street to get richer, and nowadays it's going even further thanks to the Internet setting up these unofficial, heavily-disclaimed "stock advice" stocks. The way this scam typically works is someone buys a lot of stock in a micro-cap company, and then somehow signals the general investing public (with heavy disclaimers to keep the SEC off their backs) that there is a "really hot stock." Then just before the end of the trading day, when the stock is at its peak, the original investor dumps their stock, laughing all the way to the bank.
This can be very profitable for the people causing the bandwagon hype. Take Winner-Picks' best performer ever, CNLB, with their hype purportedly pushing the stock up by 109%, doubling the money of anyone who got in early, and nearly octupling it for anyone who held it for a week before dumping. They also claim that their worst one, TGBR, "only" went up 33% for the day. What they don't tell you is that the next day, the stock opened up far below its opening price for the hype day, and it's never really recovered.
So a few people get in on what looks like a sweet deal, a possible gravy train, the Winner-Picks people make who knows how much just by saying the right four-letter word one morning, and quite a few people likely lose quite a bit of money on this gamble. It can also ruin the reputations of the companies involved by causing their valuation to unexpectedly fluctuate wildly, causing long-term investors to become incredibly wary of the company's stability.
However, it's also a very interesting look at yet another aspect of the Internet being a global village, allowing anyone to say anything and be heard by anyone. It used to be that bandwagon-hype stocks only worked for the big fatcats, where they would invest in a stock and the buzz and rumors surrounding this new investment would drive up the stock. Now anyone can go to a Yahoo! club and get rich - or shafted - for only $8 a trade on Ameritrade.
Unethical as it is, I'm going to try an experiment. I'm going to see what sorts of exponential growth I can get on, say, $500. (Hey, I could use the money.) I encourage others -- who can afford to lose the money, of course -- to join in on this experiment. Oh, and if anyone wants to help me cut my losses on ETYS, be my guest. :)
Oh, and just to keep the SEC off my (and rusty's) back, I should make a disclaimer: I am not a stock advisor. Any stocks I make a suggestion for I am likely to own holdings in. I am not a stock broker, any claims I make for any stocks are pure opinion and speculation, past performance is not an indicator of future potential, blah blah blah.