Pump 'n' dump spam

Laura Frieder and Jonathan Zittrain: “The average investor who buys a stock on the day it is most heavily touted and sells it 2 days after the touting ends will lose approximately 5.5%. For the top half of most thoroughly touted stocks, ... a spammer who buys at the ask price on the day before unleashing touts and sells at the bid price on the day his or her touting is the heaviest will, on average, earn 5.79%.”

Leonard Richardson has a site which monitors daily stock spam activity. You can see from his charts that buying these scammy penny stocks is a guaranteed way to lose money.

Leonard, by the way, is the co-author of Ruby Cookbook, 906 pages of shiny, nearly perfect Ruby code with detailed explanations of everything, this book is a fantastic way to learn Ruby.

His wife works at Fog Creek Software; if you've emailed us lately and heard back from someone named Sumana, that's her.

Students: Fog Creek Software has awesome summer internships in New York City. You get free housing, free lunches, lots of free New York activities, and a chance to write great code with great developers. And a competitive salary. Apply today: we only have four open positions and usually get hundreds of applications, which will be considered on a first-come, first-served basis.

About the Author: I'm your host, Joel Spolsky, a software developer in New York City. Since 2000, I've been writing about software development, management, business, and the Internet on this site. For my day job, I run Fog Creek Software, makers of FogBugz - the smart bug tracking software with the stupid name, and Fog Creek Copilot - the easiest way to provide remote tech support over the Internet, with nothing to install or configure.

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