Would this work? or am I an idiot?

I don't know much on the stock world, but say if you absolutely knew that a smaller company's new and hyped up product would sell by millions, why wouldn't put a load of money in the company, and when it goes up from the profit of the product, pull the money out, I know there are penalties for pulling it out early, but wouldn't you still make a hunk of change? Give me your thoughts, thanks

i'm leaning towards your an idiot but what do i know

am not really sure but the only stock advice i no is don't put all ur eggs in one basket
GOOD LUCK BUDDY ^_^

because when it goes down instead of up, you lose a lot of money.

Sounds like you are falling victim to or planning to participate in what is commonly known as a pump and dump scam.

From the Securities and Exchange Commission:
http://www.sec.gov/answers/pumpdump.htm

Pump and Dump Schemes

"Pump and dump" schemes, also known as "hype and dump manipulation," involve the touting of a company's stock (typically microcap companies) through false and misleading statements to the marketplace. After pumping the stock, fraudsters make huge profits by selling their cheap stock into the market.

Pump and dump schemes often occur on the Internet where it is common to see messages posted that urge readers to buy a stock quickly or to sell before the price goes down, or a telemarketer will call using the same sort of pitch. Often the promoters will claim to have "inside" information about an impending development or to use an "infallible" combination of economic and stock market data to pick stocks. In reality, they may be company insiders or paid promoters who stand to gain by selling their shares after the stock price is "pumped" up by the buying frenzy they create. Once these fraudsters "dump" their shares and stop hyping the stock, the price typically falls, and investors lose their money.

The SEC has information on how to avoid such scams:
http://www.sec.gov/investor/pubs/pump.htm

To steer clear of potential scams, always investigate before you invest:

Consider the Source When you see an offer on the Internet, assume it is a scam, until you can prove through your own research that it is legitimate. And remember that the people touting the stock may well be insiders of the company or paid promoters who stand to profit handsomely if you trade.

Find Out Where the Stock Trades - Many of the smallest and most thinly traded stocks cannot meet the listing requirements of the Nasdaq Stock Market or a national exchange, such as the New York Stock Exchange. Instead they trade in the "over-the-counter" market and are quoted on OTC systems, such as the OTC Bulletin Board or the Pink Sheets. Stocks that trade in the OTC market are generally among the most risky and most susceptible to manipulation.

Independently Verify Claims - It's easy for a company or its promoters to make grandiose claims about new product developments, lucrative contracts, or the company's financial health. But before you invest, make sure you've independently verified those claims.

Research the Opportunity - Always ask for вЂ” and carefully read вЂ” the prospectus or current financial statements. Check the SEC's EDGAR database to see whether the investment is registered. Some smaller companies don't have to register their securities offerings with the SEC, so always check with your state securities regulator, too.

Watch Out for High-Pressure Pitches - Beware of promoters who pressure you to buy before you have a chance to think about and fully investigate the so-called "opportunity." Don't fall for the line that you'll lose out on a "once-in-a-lifetime" chance to make big money if you don't act quickly.

Always Be Skeptical - Whenever someone you don't know offers you a hot stock tip, ask yourself: Why me? Why is this stranger giving me this tip? How might he or she benefit if I trade?

Yes, you are right you could do it this way. This is the way wall street sometimes does it i.e. over inflate the price, create the hype, and remove their money. As you can see sometimes thats all it was (hype and over inflated prices) which as you can see is coming back to bite them in the backside now.

Beware. You're surely not the only one who knows this, and others may well have already bid the price up. Often you will see a company's stock selling off when expected good news comes out, because of people doing exactly what you're talking about. So the price may already be as high as it'll get, and others may be quicker hitting the sell button.

I think the insider trading rules only apply to corporate officers, who are restricted in various ways in their stock trading. They're required to report their trades to SEC, for example.. How could there be a law preventing ordinary people who work for a company from investing in its stock? Or a law preventing corporate officers from buying when they think its a good time to buy? If you're not subject to the reporting requirements, how would anyone know? People get prosecuted for insider trading if they sell their own shares, while telling the public its a good time to buy, for example.

A good way to take advantage would be to buy out of the money call options. They're cheap, and rise rapidly in price if you're right. This gives you leveraged returns, and limits your downside risk to 100% of the amount you spent on the options. But you have to be completely right about the price movement AND timing. Most out of the money options expire worthless. Also, a brokerage will require 3 months experience , before giving you the level2 options trading privilege required to buy options. They require this because options trading is an even higherr speed method of pissing away money than regular stock trading. Uneducated investors provide the money that others take home.

You've summed up the stock exchange in a few words. Stock prices are not only controlled by the amount of product they sell, but by quality, longevity of the product. Management, owners, length of time on the Bourse. No penalties involved, it works through your broker and he gets a fee for buying stocks and selling (the same) stocks.
Peace.

IF everything you say is correct, then yes that would work. The problem is if you know for SURE that is correct, then you are falling for a felony crime called insider trading, that is trading with information that is not public.

Go for it. It's only illegal if the information you know if secret, inside information. That's why it's called insider trading.

Well that is the basic premise for the stock exchange. What you are doing is investing in companies [basically a loan] and the company may hire people, develops products, invest in capital, etc. But the hard thing is knowing what company is going to be successful and what company is going to fail.

Your thought is right if you are able to read the market timing( The right time to enter and right time to exit). The stock market consists of millions and millions of people who have their own view of trading. Your method is followed by the private venture capitalist who buys a promising company pump in funds and expand it and once it reaches a considerable size will sell it at a good price. So you are not and idiot but your idea has already taken its roots in all forms of investing and most of the cases they end up in huge scams

"if you absolutely knew" ???

So, you think you found a sure thing did you? hahaha.

Many people go broke betting or investing on what they "absolutely knew" was a sure thing and were wrong.

If it was so obvious it was a sure thing then more people would want to invest and you wouldn't make the big money.

Yea you would think so.

your an idiot

don't buy stock it only leads to trouble

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