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Doubling Stocks — Marl the Magical Robot

By Travis Johnson, Stock Gumshoe, November 30, 2007

OK, so this is not something in which I am an expert — and it’s not the kind of stock teaser I usually like to look at, because the service has nothing to do with company fundamentals or interesting stories or profits or price/sales ratios or new products or FDA approvals or fast-growing economies or any of that stuff that actually makes sense to me.

No, this is an ad for technical analysis software — and I can almost guarantee that you’ve seen the ads, they have been marketing their system very aggressively lately, and the ads have certainly been showing up on the Google ads on this site along with nearly every other finance site I’ve visited in recent weeks. They’re also really pushing their campaign to webmasters, so I’ve been sent lots of teasers to join their affiliate program and push their service myself (I have not done so, though the ads are often on my site thanks to Google).

They even have a cutesy little robot adorning their website, and a nice backstory about a computer programmer who worked for Goldman Sachs and then later had a brilliant idea for technical analysis software.

And frankly, I’m not sure if there’s anything of value that I can share with you about this service — but I will share my opinion. I would not be writing about this at all, but I have had huge numbers of readers send me notes asking whether I like the service, or understand it, or think it’s legit or a scam, and I thought it would be easier to talk to everyone at once here. My off the cuff answers, by the way, are, “no”, “no”, and “maybe, I dunno.”

So what do I think? Keeping in mind that I have not tried the service, even the free trial.

Well, I have a fundamental distrust of all quantitative and automatic stock picking systems — even though I’m quite certain that some of them probably work, and many big investors have quant systems that clearly work well for them (though not always, especially when too many of them try to run the same system at the same time). But I am not a technical analysis guy or a quant, or a short term trader or chart watcher of any kind, and I find it very hard to take the claims of stock picking software systems like this seriously.

Quantitative stock picking runs the gamut, there are many more theories and systems than any of us could possibly understand. You get folks like Navellier, who has a system that clearly works fairly well in many markets as long as you are disciplined and stay diversified, but his relies on quantitative analysis of fundamental factors to pick growth companies for relatively long holding periods, for the most part. Much different than the stock picking robot here.

And you have hedge funds that ply inefficiencies and temporary mispricings in the market — also more or less math based, and sometimes successful — as with some famous examples like James Simon’s Renaissance Technologies, which itself has also had some bad patches when quant funds got snookered by the unpredictability of the market.

Essentially, I think anyone who invests in a black box investing formula is probably asking for trouble, but that’s just me. Not necessarily the consensus view.

But my concern about Doubling Stocks runs a little bit deeper than just a general distrust of quantitative systems like this. My main concern is that we’re talking about a system that tracks only pink sheet and OTC stocks, which are almost by definition extremely small cap stocks that often have light volume, and that can be dramatically moved by a single newsletter recommendation or any other kind of similar impulse.

If you have a few thousand investors waiting to hear your recommendations, saying that you can predict a short term move in an extremely illiquid stock like these is like walking around the dog park with a sealed bag of meat and saying you can predict when the dogs are going to jump on you … all you do is say “now”, open the bag, and you’re right.

The example they give in the video on their website is Healthsonix, HSXI.PK — it was at around 13 cents on October 30 and jumped to a bit over 26 cents on the open on October 31, if I remember the video correctly. They jump through several hoops on the video to make it clear that they’re not cheating on the dates, which is just silly — if they want to cheat, they’re dealing with a historical example so it’s abundantly easy to do so. For what it’s worth, I expect this is a genuine example of their “system” at work.

So I worry that for stocks like this, it is extremely hard to tell when a recommender is really finding chart patterns that predict a huge pop the next morning — something I really am hesitant to believe — and when it is the recommender himself who is causing the pop.

Think about it: If a recommendation service has 3,000 subscribers, and the stock is a very light trader (HSXI traded just 3,000 shares today at 13 cents, according to Yahoo Finance, though that’s way below average), it is not at all unlikely that if they recommend the stock in the evening, it’s going to at least double the next morning. There will be enough readers who want to buy and place their market orders at the open that it wouldn’t be at all surprising for the stock to shoot from 13 cents to 26 cents almost immediately on the market opening, as this one did.

But … it strikes me that you’d better be nimble and get out before the Doubling Stocks enthusiasts move on, because there’s not a big natural market of folks who are otherwise interested in taking shares of these stocks of your hands. Even if today’s 3,000 share trade is an anomaly, the 3 month average of HSXI is 188,000 shares, which means only about $24,000 worth of the shares change hands on an average day. Any service with any number of subscribers could scare up a lot more than that amount of money flow any day of the week if they wanted to.

I imagine that these Doubling Stocks guys must also tell you when to get out, and fairly quickly — the shares held a gain for a week or two, but HSXI.PK today is right back where it was before “Marl” got on the case on October 30, just about 13 cents. The party has moved on.

I know nothing about how they pick stocks, and I haven’t scoured their list of past recommendations and successes that they claim in their ads. I simply know that this kind of thing — using technical analysis techniques for very short term trades on microcap, easily manipulated stocks — is absolutely something I’m not interested in. I’m not saying they manipulate these stocks, or that they intend to use their subscribers to manipulate them, I’m just saying these kinds of low volume, unlisted investments are extremely vulnerable to price movements that have nothing to do with either technical or fundamental analysis as most investors understand those terms. If I’m going to bet on something I don’t understand, I’ll go to Vegas — at least they’ll ply me with free drinks.

And not to put too fine a point on it, but if the system was this good and accurate a predictor of stock movements, why $50? Why the guaranteed money-back trial? Could it be that the system works best when lots and lots of people cycle through the program and buy these stocks on Marl’s recommendation? Or is that too cynical? I’m just wondering …

So there you have it — I’m not a math expert and I haven’t seen the program behind their special stock picking robot, “Marl” … I can’t tell you if their quantitative system holds water, or whether or not they have your best interests at heart. I can just tell you I don’t trust it, personally, and their claims and the market they choose to operate in make me suspicious. And if you read the disclaimer and note that they are paid by many of the companies they “choose,” I hope you’ll be even more suspicious.

Oh, and the “there are only 14 slots left for this service before we have to close it down” bit? That may well be a bald-faced lie, but it’s one that almost all newsletter providers trot out from time to time, and I have yet to hear about someone trying to sign up for an advisory service or a newsletter who was told, “Sorry, we’re full, your money’s no good here.” If you have had this experience, please let me know — I’d love to hear that someone is honest about this little trick that they appear to use to spur you to sign up, quick, before you let your logical brain have a moment with what you’re being sold.

And if anyone has tried this “doubling stocks” service, I’d be very interested to hear what you think. It’s quite possible that I’m way off base.

So … sorry for the side trip down an odd alley. Back to sleuthing out interesting (or not) teaser stocks next time. Have a great weekend, everyone!


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Renauld
Renauld
14 years ago

Thanks Gumshoe…where have you been all my days??
Just joined recently and have nothing but praise for your expose’

All that you wrote here about Marl is true and as a skeptic felt it was worth the $47, money back guarantee to find out! and it is a scam…to date I have received but 1 of their picks, from the pink sheets with a specific time and date to put in an order…

It climbed from .0005 to .0045 the same day..next day at 9:30 AM it tanked to .0006..Been there ever sense…how do you like them Apples?

I did not play, just watched to see what would happen.just as you wrote..they tell a person to buy so others can unload immediately, leaving one holding the bag!!

I’ve come up with my own picks just doing good old fashioned homework and have done much better.

I’m going to call their bluff on the refund and see what happens…$47 won’t send me to the poorhouse so I can chalk it up to experience if they don’t make good on the guarantee..

Even Warren Buffett admits he HAS made some mistakes before….But not often!!!

Think I’ll donate the $47 to Gumshoe!! Its been an investment and the best one I’ve ever made.

Thanks for your hard work!!

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Stalt
Stalt
14 years ago

Doubling Stocks is a “pump & dump” scheme.
I subscribed to see what “Marl” had to say. I haven’t bought any of the recommended stocks.
It appears that if you buy within minutes of the recommendation and sell in an hour or so after the stock is pumped and before everyone else dumps, it may be possible to make a few bucks.
The guarantee does not work either.. Kiss your $47.00 goodbye!

Thanks Gumshoe for a great website!

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Richard E. Lowman
14 years ago

Thanks Gunshoe for these referances which answers my questions about this scam. I will try if posible to get my 47.00 back thru ClickBank.
Thanks again.
Richard

sleaterj
sleaterj
14 years ago

Well, I did a bit of exploring within the Marl application. I used a .NET decompiler to generate the original source code and started looking through that. Not promising. To be fair, I’m not a .NET programmer (I’m a Java developer), so I may be missing something — not likely, though. However, I could find no place in the code that actually did any analysis of the stocks. Secondly, I used a database query tool to inspect their on-line MySQL database. It contained two tables. One was just a long list of stock symbols — nothing more. The contents of this table was used to create the rapidly scrolling list in the top box in the application. That’s all. The second table is a short list of stock symbols, a message (such as ‘Good Buy!’, ‘Stock is Rebounding’, ‘Good Pattern Trade’), along with a date. This table creates the slower scrolling list in the ‘Marls Watch List’ — no analysis, just displays them one after another. Lastly, it populates the ‘Stock To Buy’ field with the symbol for today’s date. No analysis. Just vomiting the ticker symbol that was predetermined to be ‘recommended’ on this date.

This code isn’t worth 28 cents, let alone $28,000. Almost certainly a Pump & Dump scam. They decide which stock they want to pump, put it in their database with the date they want to pump it (probably in collusion with the directors of the corporation being pumped). Then on the date they want to pump it, Marls all around the world report it as a recommended buy — one the puppet-masters bought the day before. Sadly, in their database, they don’t include their future picks — or we could cash in on some of their action.

Anyhow, I still plan to paper trade their touts, just for grins. Who knows, they may generate enough inertia to make a buck or two (or lose it). I’ll post my results here as they come in. What fun. Oh. and I will pursue a refund (maybe fall for some other scam and dissect it, too).

Oh, and anyone (yes, you too) can download the Marl app for free. Free! It’s at http://www.doublingstocks.com/downloadmarl.zip . So if there’s any .NET geeks out there, you can dissect it too.

Your humble guinea pig and code tinkerer.
/Mistlethrush

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jon
jon
14 years ago

I’ve had some mixed experience with the usually unreachable folks that front the marl program. It does seem like you can make some quick money in the first 45 minutes of the trading day if things happen in your favor, but I have seen just as many trade flat or turn south shortly after leaving the gate, so I have pretty much given up on it. Then I start getting the e-mails 1 or even 2 day’s late. Do you think a genius programer would think to print the date of submission somewhere inside the text, even just once? Zero replies came to multiple requests for that to happen. I had been trying to place trades over the phone. If you can’t get a look at a 5 day chart before you invest in their game don’t do it. The final discovery I enlightened myself to is that it appears that if you check the news feeds on the stock that has been picked you will find a pertinent news release dated to the previous day, usually after market close. I know that one of the major financial feeds comes out of Seattle,(Marl’s hometown) so maybe there is a backdoor channel there somewhere. My hope is that someone knows of a filter program of some type that I could put to use to the same effect on penny stocks as even if they pop and drop in the same day I can still make more in an hour or so than I can all day at my paycheck job.My conspiracy alarms are now going off as I just remembered that a previous contributor has said that there have been massive buy-ins in the week or so prior to a Marl pick. Are these legit insider purchases by people that have a right to know pertinent company info prior to it going public or are there a handful of backdoors opening and closing in circle? If this is what this batch of cronies is doing can we play their game without them?

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jon
jon
14 years ago

O.K., so I’m a fool Gumshoe. I don’t read the fine print on anything. Doubling Stocks states that it should not be construed as an independant party and that they except compensation in the amount of $125,000 from a third party or from the company itself to promote said company for the time span of one week. So I don’t think Michael is a genius programer but he is definately playing with a full deck,one that he has stacked for himself. I’ve lost a lot more than I have made on his game so I think I am finally done. Thanks for the forum.

GRgirl
GRgirl
14 years ago

I too got sucked into the allure of lots of quick cash and went to the Better Business Bureau site to check them out. It looks like they just recently listed with the BBB (April 25, 2008 I think?), but there was no record of any complaints there listed under “Doubling Stocks” out of Miami. However, the email I got from “Michael” listed the company as “Global Marketing Corporation” out of Seattle, and this company DOES have a list of unresolved complaints.
Anyone know which it is? Maybe if all of us who have failed at getting a refund (I gullibly just signed up, so haven’t tried it yet, but after reading the comments here, think I too will be seeking a refund) filed complaints with the BBB then some action will be taken and they’ll be forced to comply or at least be truthfully exposed as a scam on the BBB.

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BalletNinja
BalletNinja
13 years ago

It is impossible for a stock newsletter to give accurate daytrading advice on pink sheets.
It is just not possible. They will almost always gap and then correct just as fast. I would like to find a newsletter that is focused more on company research that is not a “pump and dump.”

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Jonny Ray
13 years ago

THANK YOU, thank you, thank you, thank you, thank you, thank you StockGumShoe and everyone for this information! I had my finger on the buy button for this product and decided to read one more review. Thank god I found this honest review by real people. It makes sense now how this scam works.

arg
arg
13 years ago

Wow I almost fell for this. These hard times makes us more likely to fall for scams like these. Just like the guy above I searched on google for one last review of “marl” and boy am I glad I came here.

Thanks Gumshoe

Rocker
Rocker
13 years ago

Thanks for posting this. Reading about Marl, I knew it was a scam. But, I’m greedy enough to want to try it just in case. You explained two simple things that shut the book on this thing. One: very low volume stocks can be moved by newsletter subscribers. Two: the low price of the newsletter (compared to any legit stock newsletter) helps to perpetuate the price jumps.

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