John Bell, 2nd March 2012

Our mysterious “John Bell” has recently published three new missives. In his latest, he promised to reveal his new “hot stock tip” on 15th March 2012. My netbots have been working overtime tracking down his latest movements and evidence is accruing as to his latest target penny stock.

Before we get too far, I want to study his missives in chronological order to allow the development of some hypotheses regarding his latest SCAM.

On 13th December 2011, our “John Bell” issued the following proclamation:

*****************

To my knowledge there are only really two ways of making money in the market.

Investing or Trading.

Trading can be profitable, but the opportunities are often only large enough for a small amount of capital.

When trading you’re always fighting an uphill battle against the frictional costs of trading.

What’s more, your competing with the likes of Goldman Sachs and their High Frequency Department.

HFT is so advanced now, they literally place their trading servers a few feet from the stock exchange servers – To save milliseconds from their execution delay!

If you instead choose to invest – You’re a man after my own heart.

The big money is made by investors who invest in high quality businesses and allow the magic of compounding to work.

This is because over the long term your investment return comes from the return the business earns on its capital.

A business that earns 6% on its capital will (over the long-term) give you a 6% annual return.

This is simply because the business will grow at 6% per year – i.e. The return they achieve on their retained earnings.

On the other hand…

A business that earns 18% on its capital has something special.

That “something” is worth a lot.

Coca-Cola earns a high return on its capital due to its brand.

Microsoft’s high return is guarded by its near monopoly on the PC market.

So, as an investor, your job is to find companies that have this special ingredient – The ability to earn high returns far into the future.

How do you find these great companies?

One method – is what I’d call the method of finding them when they’re small.

Wal-mart when Sam Walton first took it public, Apple just after the iPod proved to be a huge success.

It’s not easy.

But that’s the challenge of investing.

Happy hunting and Merry Christmas,

John Bell

*****************

Using “debunkery,” according to Ken Fisher, consider the statement that:

HFT is so advanced now, they literally place their trading servers a few feet from the stock exchange servers – To save milliseconds from their execution delay!

He claims that the computers are located a “few feet from the stock exchange servers.” There are three problems with this claim: how does he know where the computers belonging to Goldman Sachs, or any other trading house, are located; how does he know where the computers for the stock exchanges are located; and, how does he know that Goldman Sachs, or any other trading house, have computers located at each of the exchanges, which are in disparate parts of the city of New York and in cities around the world?

Goldman Sachs and the other “high frequency traders” are, most likely, up to date with regard to their internet infrastructure. That means that these companies are using the latest technologies that can reach 1000 megabytes per second transmission rates. The barrier to high transmission rates does not exist in the fiber-optic connection between the source of the information being transmitted and the recipient, but in the routers, switches, and the input-output-connections with the computer. Nevertheless, consider the claim that distance does affect transmission rates. Say that a bit can be sent over fiber-optic in the nanosecond time scale range. Just to give you a feel for such time scales, light travels about: 0.9821 feet in one nanosecond; 982 feet in a microsecond; and, 982,080 feet, or 186 miles, in a millisecond. Thus, moving the computers from Philadelphia, or any other location within 186 miles of Wall Street, to anywhere within New York City will make absolutely no difference in the speed at which trades can be made.

In his 13th December 2011 proclamation, our mysterious “John Bell” claims that “trading” of shares will not lead to accumulation of wealth but that “investing” will. This is nothing new nor revelatory. The amazing part of this “John Bell” SCAM is that people have actually paid him thousands of dollars, and $125 dollars for his poorly written “book” on hacking the stock market, for information that is already known to anyone willing to pay $2.00 for the Wall Street Journal.

The main point of his 13th December 2011 e-mail can be found in the following quoted language:

The big money is made by investors who invest in high quality businesses and allow the magic of compounding to work

This is straight out of Joel Greenblatt, who got it from Philip Fisher, who got it from Benjamin Graham.

If you want to know about investing in high quality companies that are inexpensive, then read Benjamin Graham, Philip Fisher, and Joel Greenblatt. If you want to build wealth at a measured, but satisfactory, rate, then use the teachings of these founders of the modern theory of value investing. If you want to lose more money, follow “John Bell.”

Nathan A. Busch

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23 Responses to “John Bell, 2nd March 2012”

  1. Interesting news. Thank you for your continued vigilance regarding Mr. Bell.

    Just out of curiosity, when did you get the email about the March 15th release? I have yet to receive that one, which makes me think I am in the second, or later, tier of his staggered release dates. That’s what helps make this profitable for John and the chosen few who get the earlier notifications.

    • Dan:

      Thank you for your comments and question.

      I received notification by e-mail on 1st March 2012. Our “John Bell” has done a very good job of covering his tracks on this one.

      Nathan A. Busch

      • Nathan:

        I received my initial notice on 2/28, but with no mention of when the pick would be released. Today I received notice that the pick was coming March 19.

        Curious to know what your netbots have turned up since your last reply.

        The 15th is just two days away. John usually releases his picks early in the day before the markets have opened.

        Please be sure to let us know what happens Thursday. Or what has already happened.

        So very sorry to hear about the fall you took down the stairs, too.

      • Dan:

        Thank you for your question. Please see my blog entry of today.

        Nathan A. Busch

  2. Nathan,
    Thanks for all the John Bell info. My pick notification day is March 23. Please keep me posted with whatever else you find. Sorry about your injury and please be careful. Wishing you a speedy recovery.

    • For Nathan and George:

      For some it looks like tomorrow is the big day. I am told Monday is my big day. Still others: the 23rd. I wonder when the very first release date was???

      For Jammin Java last year, I think it was in February. That’s probably the case for this year’s JJ. The stock price has been running up for a month now. Soon we too will get to cash in on this big news — only much later than many others.

      Nathan, please update us with the report you receive today, assuming Mr. Bell follows the schedule he set for himself. As always, thanks for your diligence. Yes, wishing you a full recovery.

      • Dan and George:

        Thank you for your comments. I am working on collating information this afternoon and will publish before this evening, 14th March 2012. To my way of thinking, one important aspect is whether Shane Whittle is involved with this SCAM. More information will follow.

        Nathan A. Busch

  3. Newbie Trader Says:

    Hi,

    Did anyone else get his September 1, 2012 pick? I just paid him so I have been told I was first tier.

  4. Newbie Trader Says:

    The date I’ll be releasing my summer 2012 pick is now official:

    Sunday, 1sth September

    Whatever you have planned for that day – Cancel it.

    If you’re at work, arrange to take the day off.

    Why?

    Well, because I only release one, maybe two picks per year.

    So when I do, it’s a pretty big thing.

    I only release picks I think will triple and quadruple or better.

    I’m not the type to pat myself on the back for a 30% gainer.

    These are risky picks and they should come with big, big rewards.

    My last pick (earlier this year) exploded from .17 to a high of $1.57

    My pick before that was even better: From less than .50 to over $6.00! (true.)

    You have less than two weeks to get ready.

    Trust me. You won’t want to miss this.

    John Bell

    • Newbie Trader and my Audience:

      In fact, I received the notice that you have posted here at 0507h on 11th September 2012. In the version that I received, he promised a release date of 26th September 2012. The following is the text of the e-mail that I received.

      **************

      The date I’ll be releasing my summer 2012 pick is now official:

      Wednesday, 26th September

      Whatever you have planned for that day – Cancel it.

      If you’re at work, arrange to take the day off.

      Why?

      Well, because I only release one, maybe two picks per year.

      So when I do, it’s a pretty big thing.

      I only release picks I think will triple and quadruple or better.

      I’m not the type to pat myself on the back for a 30% gainer.

      These are risky picks and they should come with big, big rewards.

      My last pick (earlier this year) exploded from .17 to a high of $1.57

      My pick before that was even better: From less than .50 to over $6.00! (true.)

      You have less than two weeks to get ready.

      Trust me. You won’t want to miss this.

      John Bell

      **************

      Clearly, the Stock SCAM was already well underway when you received your e-mail, in which he stated that the release would be on 1st September 2012. It is most unfortunate that you did not check with this weblog before you gave him your membership funds. You got “took”: unfortunately, you are amongst a multitude of individuals that subscribed to his “Penny Stock” SCAMS only to lose not only the cost of subscription but money used to chase his very risky proposals for gambling. Good luck retrieving the amount of your subscription.

      To the best of my knowledge, our mysterious “John Bell” did not release a “Magic Stock Pick” earlier this year. So his claim that it “exploded from .17 to a high of $1.57” cannot be verified. The only stock pick that “John Bell” has provided to anyone since 23rd December 2010 was JAMN. You might want to take a look at the data on the trajectory of the share price for that company. Unless you are really keen on losing a lot of money, stay away from these things. His antics and his “Magic Stock Picks” do, however, make for great entertainment.

      For completeness, the previous e-mails from our mysterious “John Bell” were as follows. At 0712h, 4th September 2012, he posted the following e-mail:

      **************

      Did you read the email I sent you last Thursday?

      I announced that I have a brand new pick I’ll be sending in a few weeks time.

      I can’t make any promises but the last stock I picked rocketed from a low of 0.17 to a high of $1.57.

      I know some of you kicked yourselves for missing out on that one (judging by the angry emails I received!).

      So don’t make the same mistake again.

      Add me to your safe senders or contact list to make sure you keep receiving my emails direct to your inbox.

      I believe this pick could be one of my best yet… DON’T MISS OUT!

      John Bell

      **************

      He also sent an e-mail at 0440h on 30th August 2012 that contained the following text:

      **************

      Listen up folks…

      In just two or three weeks I’ll be sending you my summer 2012 pick!

      You can probably remember my last pick.

      I sent it to you about six months ago. It exploded from a low of 0.17 to an absolute high of $1.57!

      Many of my subscribers made thousands and even tens of thousands of dollars within just a few weeks.

      How?

      When I release a pick I try to time it so that two things happen.

      1) I try to pick companies on the verge of hitting some big milestone. (a mining company about to release drill results, a bio-tech about to receive FDA approval etc).

      2) More importantly… I try to find companies about to embark on investor relations campaigns (i.e. about to be bought up by institutional investors).

      Here’s my ideal pick.

      I find a hot bio-tech company.

      In two weeks time the company is expected to announce the outcome of FDA tests on their cancer drug.

      Not only that, just after the FDA approval is announced the company is planning a road show on wall street to raise insitutional investor interest.

      As institutional investors aggresively buy shares the price rises and creates a positive feedback loop.

      i.e. As the price rises due to institutional buying it attracts even more investor interest and the price rises yet more.

      … pinch me.

      I’m dreaming.

      But this is the “template” I like to use to find picks.

      Not all picks will go that well. In fact most won’t.

      But because I only send one or two picks per year – My track record of finding these “perfect” plays is probably about the best in the industry.

      Anyway, I think I’ve found a new pick that fits this template.

      If you wanna know about it the very first day I announce it…

      Be sure to keep reading my emails, I’ll be officially announcing the pick date sometime next week.

      John Bell

      **************

      Finally, at 0445 on 31st July 2012, I received an e-mail from our “John Bell” that contained the following text:

      **************

      Warning: This email is for advanced students only (although compulsive gamblers are also welcome).

      In this email I’m gonna show you a very aggressive options strategy.

      Please note, options must be used with care… It’s very, very easy to lose every penny you invest in options.

      On the flip side – If you’re smart and pick your spots well, you can also make 5x returns very fast.

      Before we begin, a quick update:

      I know I’ve been promising you a new pick for a few months now. Don’t worry I haven’t forgotten.

      I expect I’ll be releasing a new pick in about 4 to 6 weeks (just after the summer slump is over).

      Anyway, here’s what you came for:

      Options are priced based on a quantitative formula known as the “Black-Scholes model”.

      The formula takes into account the stock’s price, the exercise price of the option, interest rates, time remaining and past price volatility.

      The higher a stocks past price volatility, the higher the option price.

      But past volatility does not take account of future corporate events.

      Corporate events such as spin-offs, restructurings, bankruptcies and mergers can all throw a spanner in the works of quantitative options pricing.

      Here’s what you do:

      Look for an event that will lead to very high price volatility. Buy call options that expire a few weeks after the event.

      Here’s an example.

      Let’s say you find a company with a $10/share price. In a months time this company is going to spin-off a loss making division (very common).

      Chances are, after the loss making division is out of the picture – The share price of the remaining, stronger company will rise dramatically.

      You buy a $1 call option with a $10 strike price, expiring 3 weeks after the spin-off.

      After the spin-off your option converts into shares of both the parent company and spin-off.

      Not only is the parent likely worth more as a standalone company – The spin-off will also have some value, even if purely as a turnaround situation.

      In this case, the value of the two companies is higher apart than together.

      But the black-scholes model didn’t take account of this corporate event – Because it only focuses on the numbers (historical price volatility) which told you nothing of the future events.

      John Bell

      P.S. I told you this strategy was for advanced students.

      If you didn’t understand how it works – Don’t worry.

      I have a new pick coming soon, and you won’t have to do any hard work. Just keep checking your emails 🙂

      **************

      Of course, unless you have a burning desire to lose a really large amount of money, do not follow the advice of “John Bell” on stock options just as one is prudent to not attempt to beat the market by following his advice on “Magic Stock Picks”.

      In case you want to do some digging and report back with your findings, it appears that “John Bell” is one and the same as Shane Whittle. You might want to have a study of the history of him.

      Again, it is too bad that you paid a subscription for what amounts to a “Penny Stock” SCAM. It is often difficult to be taken advantage of twice by the same person unless one is looking for a quick buck on the Internet.

      I hope this helps.

      Nathan A. Busch

      • So if anyone did receive and act on his September 1st pick, you should be at liberty to divulge the ticker symbol, eh? Come on! Be a sport —

        For Nathan: you are one day higher up on the food chain than I am. My date is 09/27. Please share in a summary format what others are telling you. This is beginning to be reminiscent of JAMN.

        And what about his early Spring pick TFER? I was looking at old offshoots of this general “John Bell” thread and that popped up. Is that the one he is referring to in the September pump-n-dump???

        Many thanks —

      • Dan and my Audience:

        It cannot be TFER because that has been flat at about 20¢ per share since the beginning of August. None of my followers have given any indication as to the ticker symbol for the current “Penny Stock” SCAM. My usual search strategies have come up empty. Our “John Bell” has done an excellent job of covering his tracks on this “magic stock” pick.

        Nathan A. Busch

  5. Ace Atieh Says:

    I think the stock is HDSI OR WAVX!!! Not completely sure but did some research.

  6. Bingo, “John Bell” has picked TFER again…hummm…

    • Dave and my audience:

      Our mysterious “John Bell” is becoming somewhat boring. It seems that TFER was such a flop the first time around that he and the insiders at TFER had to try again so that they could dump their shares at a handsome profit. This time around appears to be no better than the first. Perhaps it is time for Mr. Shane Whittle and the other low-life SCAMsters to use their brilliance and considerable skill to make money by honest engagement in the stock market. Since these people have such a deep understanding of reverse mergers, corporate law, securities law, finance law, and deep roots in the community of wealthy individuals, perhaps they would be best served if they were to assist honest companies, with real and solid financial foundation and a genuine business plan, wanting to go public to do so without the considerable expense of doing an original IPO. If they did so, they could build a solid reputation in the nano-cap and micro-cap investment community. The result would be a considerable amount of coin in their pockets without having to constantly look over their shoulder to see if the SEC man is after them.

      So, Shane and “John,” I strongly suspect that you read this blog, what do you say about working to do good in the world, make an honest and very profitable living, and staying out of federal prison?

      Nathan A. Busch

  7. Another pick coming this week ??? Have you guys seen this? My email says coming on the 5th. Here is the email:

    On Tuesday I’ll send you a report.

    This report will tell you exactly why I believe this pick could rocket.

    BUT, the report will not tell you the company name or ticker — I’ll send you that on Wednesday morning.

    Stocks in this sector have been on FIRE lately. I have a list of this company’s competitors and the smallest gain was up 4.1 times!

    This company is the last of the sector to be undiscovered by Wall Street.

    To me, it’s a miracle it isn’t trading in the double-digit price range!

    John Bell

    P.S. Watch this 30-second video NOW:

  8. christina tired of John Bell Says:

    Ncrg was his latest pick receivedd on the sixth. Graphite it took a dump the next day.These blogs are really hard to find. Jamn started out as a good thing at first. Made some good money then dumped to where your scared to sell because you dont want to except the loss. Still holding on to 4000 shares bought in the .80s and .90s. TFER next bad dump. I though it was my fault for holding on to jamn to long. Then went with TFER stupidly with out research and now losing my ass. Same old emails take the day off work and such. Bought at high of 1.01 dropped off the face of the earth next day. I hope more people can learn about this scam before its to late. And im curious about the emails of angry customers he talks about receiving. Because you cant email him back.

    • Christina:

      It pains me to hear about people, like yourself, who lost a lot of money chasing these “John Bell” penny-stock SCAMS. I take it as a given fact that whenever any promoter gets involved with a penny-stock company it is a pump-and-dump scam. Since I first called Jammin Java a penny-stock SCAM on 23rd December 2010, I have been following this “John Bell” character, who I am convinced is actually Shane Whittle, and his techniques. I do my best to warn people to stay away from these situations. However, the lure of a 2-fold, 5-fold, or 10-fold profit is powerful even for old hands such as myself and my friend Dan. If I were in your shoes, I would simply take the loss on all the penny stocks that you purchased and learn from the lesson that there is no such thing as a free lunch.

      One does not need to follow the advice of SCAM artists such as “John Bell”. It is possible to obtain handsome returns in the market if one is patient, willing to spend the time to learn how to spot genuine bargains, and be prudent in investing. For instance, on 31st July 2012, I created a small portfolio with equal amounts dedicated to the following companies: PFIN, CRAI, GAI, MPAC, and REGI; each was purchased at, or close to, the closing price on that date. On 1st October 2012, I purchased an equal amount of DCIX and added it to the portfolio.

      Since the table of information relating to this portfolio did not display well as a comment, I made it into a full post on 7th December 2012 entitled “Christina and John Bell”. Please refer to that post for the details.

      I hope that this helps.

      Nathan A. Busch

      • John’s pick of NGRC was blindsided by a HUGE pump-n-dump promo for USGT, another graphite mining company. I think his promotion was just totally overwhelmed by the blitz for USGT. My email in-box has been overflowing for a week now by different come-ons for USGT.

        Just another theory to add to the list.

        Comments?

      • Dan:

        Thank you for your comment.

        I have been following the USGT pump-and-dump SCAM. Since I found USGT, I had a strong sense that that company was also a “John Bell” reincarnate pump-and-dump SCAM. My hypothesis is based upon the following: he weakly sends out e-mails talking about his children and promises that he will close up shop if his next “magic stock pick” fails to provide the promised returns; then he announces his “magic stock pick” which is TFER recycled; TFER then flops; then “John Bell” issues e-mails containing very poor grammar, vulgarities, and rhapsodies about his next great “magic stock pick” that is a sure winner; he then announces that his “magic stock pick” is NGRC; NGRC flops.

        I suspect that, as you have said, he has visited the well one too many times and he is assuming a new image. It may be that we are near the end of “John Bell” as he has been known. Nevertheless, he will continue his penny-stock SCAMS, just under a new disguise.

        It is my hypothesis that the new “John Bell”, whatever his assumed name will be, will remain Shane Whittle.

        I hope that this helps.

        Nathan A. Busch

  9. New John Bell email FYI on 1/15/13. See Below:

    Look, guys.

    I know my December pick didn’t do great.

    And I wanna make it up to you.

    Here’s my plan:

    My next pick will be an NYSE company.

    This company has a big short position against it.

    When myself and some friends shine a light on this thing – I think it could go parabolic!

    I can’t promise anything.

    I’m working on this. It may happen, it may not.

    Who knows.

    John Bell

    P.S. I’m calling this my “give back” pick

  10. Curious — I, too, received this on 1/15/13. Have others received it earlier? If this isn’t a Pump-n-Dump of a Penny Stock, then what’s the angle?

    Comments? Nathan?

    • Dan, and my audience:

      Recall that many penny stock companies are listed on the NYSE. These are not immune for being exploited as a Penny Stock Scam.

      I hope that this helps.

      Nathan A. Busch

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