Jagoinvestor

June 7, 2011

How stock scams works in India

I will teach you how stock scams work today and for that Let me declare something – “After years of study and hard work, I have come up with a strategy which can predict stock markets movement with almost 100% accuracy. Each month I can tell you which way market will move in next 30 days, it can be UP or DOWN and I can guarantee that. If someone needs to see the performance, I can give a free 6 tips trial.” Now what will be someone’s reaction on hearing this? Most probably, some of you will get excited and interested in getting these free tips, at least to check if I am saying truth or not! . Right now I have a big subscriber base with more than 10,000 people (11.5k to be precise) whom I can reach by email. Let’s see how I can create a stock tip scam –

Stock Scam

Here is how we will build a scenario wherein you are Ajay who is extremely interested in knowing about the tops which are almost 100% accurate. Ajay is bearing some disbelief in his mind, but due to the trust factor in the given tips he thinks ‘Let’s see what tips Manish gives, they are free anyway and by reading his tips I am not losing anything’.

I start sending you exactly one tip each month and it starts this way:

Tip #1 (May) : Markets are headed UP

Reaction  : Markets really went UP in the month of May. Ajay feels good, but still he is confused if its just luck or did It really went up based on my tip . Ajay anyways wanted to just check the tip and how it turns out . He is a bit impressed and he has made up his mind to act upon the tips if 3 consecutive tips work.

Tip #2 (June) : Markets are headed UP

Reaction  : Markets after a bit of volatility finally went up and the tip was a success again! Markets are up by great extent, but Ajay feels like a fool to be so fearful and not act on it. But his confidence has started building up. If the next tip also works, Ajay will invest some money for sure based on the tip!

Tip #3 (July) : Markets are headed DOWN

Reaction : Crash! A huge sell off came in the month of July and the 3rd tip in a row was correct. Ajay starts feeling “Oh my god! Looks like Manish really have come up with something amazing which can predict markets” Ajay makes up his mind to “try” next 3 tips and see how it performs!

Tip #4 (Aug) : Markets are headed UP

Reaction : With all the excitement, Ajay has invested Rs 10,000 in the markets to see if he can make some quick bucks! However, Markets are headed down in the starting of the month and all the TV channels are confirming that next Crash is on the way. Ajay is a bit nervous and secretly praying for the tip to work somehow. He wants market to go UP as per the tip. Everybody around him has already sold off and decided to sell of all the stocks, but you are on the other side. You are praying, literally! And here it comes, markets make a turn up side and it makes one of the sharpest come back in 1 week. Ajay is now in profit and he feels like a winner. Ajay’s confidence in my tips is becoming stronger, but still he is not ready to take BIG risks, he needs to solid confirmation that the tips will fall true no matter what, which is about to come .He will invest 40k in the next tip of mine.

Tip #5 (Sept) : Markets are headed DOWN

Reaction :  Ajay thinks that he should liquidate all the investments in direct stocks and even his mutual funds. His friends do not think alike and suggest him that he should not go with the tip, but Ajay wants to confirm the tips and wants to see the affect on his investments in real time 🙂 Markets move downside and he is now confirmed that there is really some kind of mega-research done by Manish to come up with the tips using his secret-strategy. Ajay can now visualize how he can become a millionaire soon by subscribing to the tips for next 1-2 yrs. He is just can’t wait for the last tip to show its magic!

Tip #6 (Oct) : Markets are headed DOWN

Reaction : Ajay is totally with the tips now and has decided to use this last one to make some quick bucks, he does some short selling and buys some puts options by finding out how to make money in falling markets. With his confidence in the free tips, he does not lose focus and waits for the tips to turn correct. Markets fall as per the tip and due to his decisions, Ajay has made some amazing money this time. He is clear that he wants these tips at any cost now!

Free tips are over now.

Free tips are over now .

Taking money from the targets – How Stock Scams unfold

Tips are over now, Ajay and many others like Ajay has experienced the amazing tips which really worked. They all get a mail after few days from me.

Hi, you might have already got 6 free tips from me each month, we give only one tip each month, but it’s bound to work. It’s based on our strategy which is based on years of research. If you want to continue getting the tips further. It would cost Rs 50,000 for 1 year subscription. You can expect the same accuracy like you saw in last 6 months.

Disclaimer: The tips are highly accurate and we make sure they are accurate, but we can’t promise it and can’t guarantee it legally. Risk is yours

Ajay is so much impressed with my tips performance and so much drowned in greed, that he subscribes to my offer and pays 2 lacs for the secret tips subscription. The tips start coming from next month. But there is some issue this time! . Somehow, not all the tips are working this time. Some tips work, some does not. It’s not at all accurate like it was before. In reality all the tips are just random tips and Ajay is totally frustrated. He has lost a lot of money because he invested big money each time, thinking it would work!

The truth is Ajay fall prey to a stock scam. Now let me share how all this works.

How this scam works

At this moment I have around 10k or more email subscribers and I can send emails to this 10,000 group. I divide this group of 10,000 readers into 2 parts A and B, I send a tip “BUY” to A group and tip “SELL” to B group. One of them will be true for sure. After month is over, I see which tip was correct. If A group was correct, I discard group B and only have people in group A as my final group. This group will be the group which got “correct” tip.

Now I do the same thing again, I divide them in group A and B with 2,500 members each and send “BUY” and “SELL” tip to them. Now again, markets will move UP or DOWN and one of those groups will be right at the end of the month. I again discard the group which got wrong tip. This way I continue doing it for 6 times and at the end I have small group of 156 people who was right all the 6 times and Ajay accidently belonged to his group.

How Tip Scam works

Targets paying for the subscription

Now you can imagine how many people will fall prey to these scams? Even if 20% of the people fall in the trap and are ready to pay Rs 50,00o, it would be Rs 10 lacs in total! Here you can clearly see that out of 10,000 there will always be a group of 156 people who will always get “accurate” tips and the beauty of this strategy is that people who were discarded only get one wrong tip, and after that wrong tip, they don’t get any more tips.

There are many tip providers in real life who claim to give you 90-95% accurate tips with free 1 week trial, If you are getting a lot of right tips, you might be that lucky small group which is their “TARGET” as seen above in the chart. Don’t fall prey to these stock scams. Beware!

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194 Comments
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Vyom
Vyom
3 years ago

Dear Manish,
God Bless You! You have just saved me from falling into this trap. I have been getting calls from Gujarat regarding free trial. Your article was an eye opener and i request all such aware citizens like you to share your knowledge so that these dirty people can be prevented from stealing hard earned money of others. Thank you once again . May you find lot of happiness in life

trackback
Why And How All Stock Tips Are Scam and Fraud?
7 years ago

[…] Chauhan of JagoInvestor has explained with an awesome example which you can read how 100% accurate stock tips trap investors. His example deals with 6 months but the same model is used for 6 days where if you see 6 […]

reddy
reddy
8 years ago

No need of such long 1 week trial to impress the traders. Just 1 day trial is enough to attract people to this dirty game. They give a call…..if it works, they will be behind you until you subscribe. I had a bitter experience with such tips provider based in gujarat. He gave me a call in options which has hit the target. Then he told me pay Rs.30,000 into so and so account, you will be a life time member of this scheme. When a call went into a loss, he simply said we have also lost money in the call. I asked him that then why are you charging money for such poor ability. He said read our disclaimer. Just by adding a disclaimer they are escaping. Now, whenever I get a call from tips providers, I say them I donot trade but I invest in equities for long term ie 3 years period. You give 1 trial call so that I will assess your performance after waiting for 3 years. They started disconnecting the phones.

Shankar
Shankar
8 years ago

Good article. I was getting emails from equity master than I was searching for reviews and landed here. Thanks for sharing this and saving me 🙂

AliakbarRiyaz
AliakbarRiyaz
8 years ago

Dear Manish,

This is realy a very helpful information. I am daily getting SMSs from different research companies to subscribe nd they are giving free trials too. However after reading this article. I am not subscribing to anyone. I watch CNBC AAWAZ DAILY in the morning since 7.00 am till market opening. It is very helpful to pick stocks for long term. No one can become millionaire overnight.

Also if you can tell me whether big names like SP TULSIAN, SUKHANI are reliable for these tips.

trackback
How to lose your money in Stock Market
8 years ago

[…] Scam programs collect thousands of emails of investors and recommend them stocks. They use divide and conquer method to predict stocks with 100% accuracy but actually they fool people. Manish, founder of JagoInvestor has written a beautiful article on how stock scam programs work. […]

Gagan
Gagan
9 years ago

Equitymaster.com is asking me subscription for Rs. 2 lakhs for “Equity Master Reserve” scheme. They think that I am a fool who will pay. I earn 12% through SIP in last few years.

Mil
Mil
9 years ago

I am getting exactly similar emails from a company called equitymaster. What are your views on this company?

satyajit
satyajit
Reply to  Mil
7 years ago

Equitymaster is genuine.But they are just too conservative.

pankaj
pankaj
9 years ago

Very informative blogs. Thanks a lot.

Ravi
Ravi
9 years ago

Manish,

You are awesome. GOod analysis

Prabhat Dhayal
Prabhat Dhayal
10 years ago

Dear Manish,
But i have subscribed to intraday tips in cash market of Equitypandit, a month back. how come their accuracy is good for last whole month, if you say that the consistency is not possible in the accuracy. They don’t even provide free trial. There might be few companies, which are really doing good things in technical analysis. What is your suggestion, is there some strategy in it? please throw some light on it.

sachin
sachin
10 years ago

Don’t ever pay for this accurate share tips site.
Just imagine if they had already knew the market, the would have kept as secret & earned more money without informing you.
Just take an example if I know today share is going up by Rs.8/- & news is confirmed. Then I would buy 1000 shares which result me Rs.8000/- profit after market end.
If I pass this information to you or say 100 people everyone will buy these shares & then margin will be low due to restriction & limit offer by broker trading site.
But if I pass this information by charging Rs.8000/- p.m. , I get profit in 1 day by one person & just analyze if 100 will turn in month , it will 100*8000=Rs.8,00,000/-p.m. & this rally will continue by every month.
So be careful & watch market & study daily trend to become successful trader. Always do one intraday & one delivery call. Monthly sip in Mutual fund is best option.
If you can become wealthy with these share trading tips sites, nobody will work on this planet earth, everyone will be doing share trading, they don’t need to go to job or to engage in any business.
So be prepare for good market returns on u r own study.

afa
afa
Reply to  sachin
8 years ago

Awesome, thank you for the comment

Sandeep
Sandeep
11 years ago

But what about the market study?
the question is why do we( in India) not entered in share market after good study ?
why we are depends on all these scams ?

problem is everybody in market wants to earn quick bucks but for this no one wants to study the market, only few peoples are go through proper way. they use types of charts, they use types of indicators, all type of study material what they have. and i think they were succeeded or succeeding.

i read somewhere else, in usa peoples who are in share market among them 85% are invested in share market after fundamental, technical analysis but here in India the ratio is only 15% among the peoples who are in share market.

so why don’t we take the help of all the market instruments, all charts, all parameters we have? we are not doing this type of study this is why , these type of scam creators building their network and fools us.

so please understand market before investing and follow market rules very strictly then market will gives you very good returns. and i am not just saying it, its my personal experience.

Manish
i just read your article on credit cards, it is very helpful for peoples like me who don’t inquire very deeply. and your other articles are also very useful.

but seems like you are not so positive on share market because you think its highly risky, i know it is very risky but i think when we go in proper way we can at least control the risk .

please do not take it personally.

Punit Gupta
Punit Gupta
Reply to  Jagoinvestor
10 years ago

I dont want to put a number on it but yes agree majority of people come to stock market to become rich overnight. And they go to mutual funds to have their savings secured. Both extremes are little comical to me.

If one takes time in diligently studying companies and invests for long term, they are set to beat the sensex or mutual funds.

Similarly people trying to do short term trading specially intraday stuff, find it extremely hard to maintain their calm and not fall prey to such services. I have experienced it myself when I started but slowly I learned to stay away from such people who are trading irrationally.

Punit Gupta
Punit Gupta
Reply to  Jagoinvestor
10 years ago

Good point. Not everyone has the skill / time to actually be able to do it themselves. There are some people who are good at it while others struggle. I gave the example of index because most funds benchmark their performance on that. Beating index while its difficult, not impossible if you put in required amount of discipline and research behind it.

However I would admit, its probably easier said than done. I myself struggled for a while before finding out what works for me. And if you ask me, obviously I don’t know what that magic pill is which can help people get there. And thats the reason why mutual funds need to exist. People who like to have control and like to do research themselves, picking stocks directly is an option for them. Maybe with proper education and training that number could be increased significantly.

Rajandran R
Rajandran R
11 years ago

Apart from Stock Tips scam here is how trading Signal Scam will work worldwide and many such stores are already running in india too.

1)Download free Programming strategies with Buy/Sell logic available in the web which provides Buy and Sell indication on the chart(Especially Intraday Charts)

2)Do Some Cosmetic Changes in the Trading System(AFL/MT4 codings)

3)Open a Website and claim that your trading strategies have 90-95% accuracy in winning

4)Promote in Facebook groups with some sample charts shows enormous profits

5)Target to customers who really wants a trading edge and not aware about trading strategies or mathematical models. Sell it to them

Rajandran R
Rajandran R
11 years ago

Apart from Stock Tips scam this how trading Signal Scam will work worldwide and many such stores are already running in india too

1)Download free Programming strategies with Buy/Sell login available in the web which provides Buy and Sell indication on the chart(Especially Intraday Charts)

2)Do Some Cosmetic Changes in the Trading System(AFL/MT4 codings)

3)Open a Website and claim that your trading strategies have 90-95% accuracy in winning

4)Promote in Facebook groups with some sample charts shows enormous profits

5)Target to customers who really wants a trading edge and not aware about trading strategies or mathematical models

Punit Gupta
Punit Gupta
Reply to  Rajandran R
10 years ago

If someone says the guarantee or sure tips, make sure to run as fast as you can. Investing / trading is an art which many people have learned and such words do not exist in their dictionary. I have been trading for more than 4 years and I have NEVER seen anyone being right more than 60-70% of the times.

In fact most successful traders I have interacted with have less than 60% hit ratios. They are just good at cutting their losses fast.

Glen
Glen
11 years ago

thanks a lot. being a novice investor, these kind of articles really help. please keep up the good work.
I was wondering, why not randomly select 20 stocks and divide them ourselves and try our luck 😉

Ashvin
Ashvin
12 years ago

Dear Manish,

I am really surprised to read this article. I am receiving daily SMS even without subscribing! I never acted upon that. I am also getting their calls.

This is really an excellent article. I was about to subscribe again with someone but now I won’t.

I wrote “again” because I have subscribed to one of such scheme naming “Crorepati” in one year. Initially stock moved up a bit but never reached to target of 1000 to 2000 times! Now, in loss though not huge. He is having experience of 25 years in stock market and so…

Keep sharing such articles…
Thanks.
Ashvin

one of Your Friend
one of Your Friend
12 years ago

@Mr. Manish first of all I Like to Thank you for sharing knowledge With Us

I just came Acrooss your website in first look Its Is just like Normal website then As i am fliping page i realiase that in every artical you invested Your energy and Knowledge spacial in stock market and Money Article honestly i surfed Lot as i am related to science i have not any sense related to Money but None of website language I understand but in u r website it not same it cover little and basic principal of investing if you Know any other link which is help for non commerce ppl then please share it

with best Regards
One of Your Fan

Ganesh
Ganesh
Reply to  Jagoinvestor
8 years ago

Dear Manish…
I am trading aince lastone and half years and prefer to trade on intra day..
I never made handsome money through it… just managed to cut my losses… now i am getting call from Capital Grow saying they qill provide me with a tip daily 4-5 stock investment msg qill come and I can start investing from min 5k… and they are telling only after i am satisfied i can suscribe to them.. subscription amount is 3000 per month…

What do you think should i give a try?

mansi
mansi
12 years ago

Hi

The Information on the blog is good, you are doing a great job

Penchala Kumar M
Penchala Kumar M
13 years ago

Hi Manish,

I am also a victim of this type of a scam. I subscribed to such tips 1 year back. Initially i gained 20k & later lost 40k. I never thought that i fell prey to such a scam with simple logic.

I always had a doubt in my mind… if a person is able to give tip to others, why can’t he invest & become richer…

Now i feel that there in no shortcut to success…

Good one Manish…Keep it up…

Thanks,
Penchala