Is this a valid occupation?

[Spaghetti]

I was talking to a friend ages ago who knows nothing and cares little for stock market and because they knew I was, asked if I knew about a company called (could be many). I said yes, very popular atm and he said he knew the owners of the company and they keep finding new ways to raise capital to keep their yachts afloat. He said why didn't I just do something like that rather than bother with speculating on the market. He said they had had a real good life for 20 years doing this yet not once did any of their projects make any money nor did they ever intend they would. I must admit I gave the idea 5 minutes thought at the time lol


Thinking about it though it is accepted as perfectly legitimate, provides jobs and wealth for some. Noboby forces anyone to buy and no forces anyone to take the risk, just mention a few key words that are exciting the market at the time and keep fingers crossed. You have some risk as does buyers of the stock. Yet why does it feel criminal?

Would anyone consider doing this during bubble times? Or at any time if they have the marketing skills of the above mentioned example.

 

[Julia]

I doubt that it would be as simple as your friend made it sound.

 

[cuttlefish]

Thats an interesting question Spaghetti. I have no guilt feelings about the idea of living off trading/investing - which really arguably doesn't contribute much to anything except possibly as participating in the way that capital flows and thus what activity gets funded or otherwise (which maybe does serve some productive purpose).

But what you describe above on the other hand sounds wrong. Maybe its related to the intent. At least with investing I started with my own hard earned and my intent is apply capital in a way that is productive for myself and thus for society - and if I don't apply it in a productive way my capital gets eroded.

On the other hand raising capital from other people with no real intent of applying it in any meaningful way, purely to fund a lifestyle, well that sounds like sponging to me.

 

[Spaghetti]

I maybe bored lol but find it amusing to go back and see the company announcements. I will not disclose who as probably apply to many. They raise money for drilling, then more based on a few good drill results and take forever to release jorc. So they do end up with something of value except they flog it for a fraction of what it cost to prove up. So at not cost to them they have some funds now for next project. So they raise say 10 million to get 1 million. Nothing ever returned to stock owners. The particular company is worthless atm and maybe enough cash for 4-6 months so I am going to see what they do next. Maybe my valid occupation will be to write a book about it

 

[nioka]

I doubt that it would be as simple as your friend made it sound.

Actually it IS that simple. I have been caught up in the past with just such an investment where I was sure of the product and conned by the directors. I may even be involved in such a scheme at this very moment and I am waiting to see the direction those in control are about to take. Are they for the investors or just for themselves is the big question. They, alone, can provide the answer.
Then again,think Alan Bond, Christopher Skase, Larry Adler etc. Isn't that what they have done in the past.

 

[Bushman]

Err ASIC/ASX might have something to say about that. There are 'stringent' rules about the accuracy of data in prospectuses and the like.

Multo jail time if you are found out. It is, after all, fraud and the directors would deserve to be nailed.

But the law is one thing and enforcement of the law another.

 

[Aussiest]

I was talking to a friend ages ago who knows nothing and cares little for stock market and because they knew I was, asked if I knew about a company called (could be many). I said yes, very popular atm and he said he knew the owners of the company and they keep finding new ways to raise capital to keep their yachts afloat. He said why didn't I just do something like that rather than bother with speculating on the market. He said they had had a real good life for 20 years doing this yet not once did any of their projects make any money nor did they ever intend they would. I must admit I gave the idea 5 minutes thought at the time lol


Thinking about it though it is accepted as perfectly legitimate, provides jobs and wealth for some. Noboby forces anyone to buy and no forces anyone to take the risk, just mention a few key words that are exciting the market at the time and keep fingers crossed. You have some risk as does buyers of the stock. Yet why does it feel criminal?

Would anyone consider doing this during bubble times? Or at any time if they have the marketing skills of the above mentioned example.

Spaghetti,

I have a relative who plays poker for a living, which involves lying (as in the form of bluffing), cheating and relying on 'fish' for your next buck. The point is, poker is a game of deception as it is not always the 'best cards' that win the hand.

The way i see it, i do nobody any harm except myself if i lose money. Share trading allows me to live the type of life that i want to live, which makes me a more productive person, happier and able to offer more on a personal level to people. Eg, when i go into a shop, i am happy, as opposed to being bitter and twisted because i work for some aweful boss.

I hear what you're saying about marketing. 'Markets' are run by clever ideas and giftwrapping, regardless of how little or how much the product offers. You only have to look at most popular consumer brands to realise this. So, yes, there is definately a gap between the value of a product or business and how it is presented to consumers.

 

[pepperoni]

I was talking to a friend ages ago who knows nothing and cares little for stock market and because they knew I was, asked if I knew about a company called (could be many). I said yes, very popular atm and he said he knew the owners of the company and they keep finding new ways to raise capital to keep their yachts afloat. He said why didn't I just do something like that rather than bother with speculating on the market. He said they had had a real good life for 20 years doing this yet not once did any of their projects make any money nor did they ever intend they would. I must admit I gave the idea 5 minutes thought at the time lol


Thinking about it though it is accepted as perfectly legitimate, provides jobs and wealth for some. Noboby forces anyone to buy and no forces anyone to take the risk, just mention a few key words that are exciting the market at the time and keep fingers crossed. You have some risk as does buyers of the stock. Yet why does it feel criminal?

Would anyone consider doing this during bubble times? Or at any time if they have the marketing skills of the above mentioned example.

Sounds like a good way to get on ACA, or worse alot of interest from the ACCC for misleading and deceptive conduct.

 

[nioka]

Sounds like a good way to get on ACA, or worse alot of interest from the ACCC for misleading and deceptive conduct.

That usually happens after the event. It happens after people have lost their money and the promoters have skimmed a fortune.( and often within the law). Firepower is a good example of someone living the high life at the expense of a lot of small shareholders (and some not so small). It is not newsworthy unless it has happened.

 

[Spaghetti]

Err ASIC/ASX might have something to say about that. There are 'stringent' rules about the accuracy of data in prospectuses and the like.

Multo jail time if you are found out. It is, after all, fraud and the directors would deserve to be nailed.

But the law is one thing and enforcement of the law another.

Bushman an pepperoni,

I cannot see any provable attempt at fraud in this example. There are explorers and say as much, make no claims to want to mine, make no claims it will be worth anything. Just choose the sector of the moment and let the penny hopeful status do the rest. Some speculative buy recommendations by brokers doing placements could raise an eyebrow. I guess someone qualified maybe able to tell if the resource they are chasing will ever be worth more than the money raised to find out, not sure. If they know full well it never will be then perhaps disception but they could just claim they really felt they were going to find lassiters gold or such.

It actually seems somewhat safer for shareholders than attempts at mining as that seems more likely to fail than continual explorer status with masters of marketing at the helm. A little success can kill a company either by trying to mine smallish deposits in high cost environment or by being taken over, so can see incentive to focus on small but rampable projects to protect one's job. Not sure what could be done about it. Probably nothing. The length of time some of these have been operating looks like not a bad business to be in. I guess it all will end when every square inch of the Australian outback has been drilled lol.

So does seem legally legitimate. Well happens all the time so must be.They make no false claim except perhaps "delivëring shareholder value" but no company can guarantee that.

 

[ZzzzDad]

This sounds like a company I've held stock in for the last twelve years. They go from project to project to project, and never have actually mined anything. They have big plans, raise some financing for it, and then decide it is not economical, and move on. In the meantime, the two main directors of the company, and their two associated companies get huge fees.

I've always chalked it up to bad luck, market conditions, and country risk, but hmmmmm......

Like the fool I am though, I'm still hoping they will hit the big time. They are in arbitration with an African country now. Click on my latest posts, and you will see which company I am talking about. LOL

 

[Wysiwyg]

Spag, do you mean companies that continuously change tack and `excite` the market with announcements (like CVI or the Uranium explorers).Like they are existing for reasons other than actually becoming a successful business.

Set up their mates in an executive role on an `investor` ensured income.

 

[IFocus]

This is very common particularly when the market is running hot, in the dot com days two bit mining company's were changing their names to a dot com company and doubling the share price as a result.

As nioka has pointed out plenty around these days big and small.

As for ASIC/ASX clamping down, well they either don't or do it way to late

 

[Aussiest]

Strategic Energy Resources (SER), formerly known as Eagle Bay Resources = big dud!

 

[Spaghetti]

Yep, exactly those type of companies. You know all about them but when you ask yourself how you would go about it and do it yourself, you get this criminal feeling come all over your body. Yet I have supported them by buying so creating a demand for what they do so not going to plead victim status, plus profited along with them. Ethical dilemma. I have tried to stop posting about spec to a degree as I think they should do their own marketing lol seeing what they paid

 

[Julia]

Actually it IS that simple. I have been caught up in the past with just such an investment where I was sure of the product and conned by the directors. I may even be involved in such a scheme at this very moment and I am waiting to see the direction those in control are about to take. Are they for the investors or just for themselves is the big question. They, alone, can provide the answer.
Then again,think Alan Bond, Christopher Skase, Larry Adler etc. Isn't that what they have done in the past.

Well, I'm surprised, Nioka. You're pretty savvy about things.
So it's a case of 'buyer beware' then.

If it's not inappropriate, can you describe a bit about how you became convinced of the validity of the product/scheme?

Re ASIC, I agree that they are pathetic. Fail to act until it's far too late and even then dither about in a half-assed way.

 

[Spaghetti]

This sounds like a company I've held stock in for the last twelve years. They go from project to project to project, and never have actually mined anything. They have big plans, raise some financing for it, and then decide it is not economical, and move on. In the meantime, the two main directors of the company, and their two associated companies get huge fees.

I've always chalked it up to bad luck, market conditions, and country risk, but hmmmmm......

Like the fool I am though, I'm still hoping they will hit the big time. They are in arbitration with an African country now. Click on my latest posts, and you will see which company I am talking about. LOL

12 years!!, maybe a way in. Write and ask if you qaulify for a directorship

 

[cuttlefish]

I've always known there's been people with no relevant experience jumping on bandwagons and peddling worthless assets, but I was at least a little optimistic that, apart from the rare exceptions, the people involved still had within them some blind optimism that they were going to make money for their shareholders - even though any seasoned observer would have known there was little chance of it.

In the dot com boom I saw many businesses being run by people that had no general business management experience, no product, no marketing experience, no project management experience and no IT background but all of them were blindly optimistic they were actually going to succeed and generate some sort of value for their shareholders (even if it was to take an idea to a certain point and sell it on).

In fact a lot of them lost their own money in their ventures as well as the shareholders money.

But I guess as time goes on I realise that its right to be more cynical than that.

 

[Spaghetti]

Cuttlefish

Yes maybe at first they do believe they are onto something big but those that have been doing it for 20-30 years on the market I guess they know better. The number of executives and board members at times for tiny little operations makes me wonder.

 

[korrupt_1]

Yet why does it feel criminal?

Criminal? perhaps not... but... moral? totally unmoral and pure evil...

Such bussiness should be found out and the operators should be locked up...

There are other ways to make a $ and conning people is not and an honest way to make a living.