The Fine Line To Making Money On The Net
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The Fine Line To Making Money On The Net
Copyright © 2001 Gauher Chaudhry, All Rights Reserved.
What is the fine line to making money on the Internet? How far will someone go
to make money on the Internet?
We have been blessed since the mid 90's with this superb new technology
that has been making ordinary people overnight millionaires.
Fifteen year-old Jonathan Lebed managed to amass nearly $800,000 in only 6
months. This is before the U.S. Securities and Exchange Commission came
after Jonathan and accused him of manipulating the stock markets.
How?
By posting hundreds of messages on Yahoo! Finance under fictitious names
promoting stocks to others. Stocks the normally had a daily volume of only
60,000 would end up being traded over one million times. Once the price
rose, Jonathan would sell and make a profit. Did Jonathan Lebed commit a
crime? Is what he did unethical?
Are people who buy stocks just because someone says to buy it just plain
stupid? I don't know who to blame more, Jonathan or the stock buyer.
As a professional accountant, I can see that most of the stock prices of
dot com companies are seriously inflated. There are mathematical formulas
to calculating the true value of a stock. Since I understand financial
statements and various financial ratios, I can pretty much calculate what
a companies stock is truly worth.
But, is that what the stock market is really about? Do people trade on
what they read in a company's financial statements or listen to the
rumours that spread like wildfire in the financial markets. Amazon.com
hasn't made a profit in its first five years of operations, yet the price
of there stock continued to rise.
The stock market really appears to be a gathering ground for manipulators.
The successful manipulators are the ones who make profits. The people who
lose money are the novices who listen and act on every word someone else
says or writes.
Jonathan's case got me thinking about the Internet and how it has also
become a playing ground for Internet manipulators. There are so many scams
and fly-by-night operations on the Internet, that people will purchase on
emotion rather than reason. Do you honestly believe that you can make
$100,000 doing absolutely nothing as some sales letters suggest?
There are literally thousands of companies and individuals that send out
mass email messages making false claims and promises.
The SEC is trying to regulate the stock market, but who is regulating the
Internet? Although we have great organizations such as Internet
Scambusters who try to warn consumers of Internet scams, but it is
obviously not enough.
Although I don't believe Jonathan committed a crime, I do feel that there
are some ethical issues to consider. Why did he use different emails to
post his messages on Yahoo! Finance? Did he write in his messages that he
was just a 15 year-old boy? Did he try to intentionally mislead people?
But when it comes down to it, what is the difference between what Jonathan
did and what financial advisors do everyday on Wall Street? On September
20, 2000, the SEC settled their case with Jonathan Lebed. Although he had
to pay close to $285,000 to settle the case, he did get to keep close to
half a million dollars.
Unfortunately, there are hundreds of real Internet scammers who will keep all
their profits and will not be accountable to anyone.
Want to read more of my articles? Then go to: http://www.freecoolcash.com/articles
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Gauher Chaudhry is editor of Cool Cash Ezine. You can subscribe by sending
an email to subscribe@freecoolcash.com with "sub-art" in the subject.
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