Ben Stein Watch, penny-stock edition

By Felix Salmon
May 23, 2011
book called How to Ruin Your Financial Life, consisting of short sarcastic chapters giving extremely bad advice.

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In 2004, Ben Stein wrote a thin book called How to Ruin Your Financial Life, a collection of short sarcastic chapters giving extremely bad advice. Chapter 32 is entitled “Invest in Penny Stocks”, and it aims directly at the purveyors of “advice” about the same:

If you buy GE at $25 and it goes down by $.50, you’ve lost 2 percent, but if you buy XYZ at $.50 and it goes down by $.50, you’ve lost 100 percent.

This will never happen to you, though, because you’re only buying really top-quality penny stocks, the GEs and GMs of the penny stocks — only they haven’t been discovered yet.

Plus, you’re only buying after you’ve gotten really hot tips, and when you know for sure that you’re going to watch that stock zoom into the stratosphere.

Let’s put aside for the time being Stein’s decision to cite GM as being the kind of wonderful stock which goes up and up in value, because now Stein has endorsed Accredited Members Inc., “a leading publisher of micro cap investment research”:

Stein firmly believes micro caps have a place in every investor’s portfolio and that the kind of in-depth research AMI brings to its readers can mean the difference between success and failure in investing in the micro cap space. “AMI does the kind of research that can result in triumph and avoid tragedy in the micro cap world. An informed investor is the best kind of investor,” said Stein, “and in the micro cap and nano cap world, AMI is an important path to being informed.”

Later this year, Stein is publishing “What Would Ben Stein Do: Applying the Wisdom of a Modern-Day Prophet to Tackle the Challenges of Work and Life“. Yes, he really does refer to himself as a “modern-day prophet”, probably on the strength of his farsighted views on things like the GM share price. It’s going to be fascinating to see what the book says about selling out all your stated beliefs if someone comes along with a big enough check. Or what to do if you follow a modern-day prophet who gives wildly contradictory advice to his acolytes.

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4 comments so far

What penny stocks are for right? Can you share more please?

Posted by stockprofessors | Report as abusive

Thanks for sharing this information. Well done!

Posted by stockprofessors | Report as abusive

Most penny stocks are indubitably a swing trader’s paradise! Thanks for sharing!

Posted by AmazingPenny | Report as abusive

This post may scare some investors off, but if you are doing any day trading. Penny stocks are a must in this economy.

Posted by SanDiegoMoving | Report as abusive
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