tactical trader

While having a much-needed clear out of old emails today I came across one advertising a newsletter called The Natural Contrarian. Normally I would dismiss this kind of email as spam and it would be deleted within seconds, but for some forgotten reason I decided to keep this one when it arrived almost a year ago so that I could see just how well or badly the ‘hot tip’ it contained would perform. Here’s how author of the newsletter, Scott S. Fraser, introduces himself:

I am clearly among the very best of America’s oil and gas stock gurus. As you may recall, six of my previous oil and gas stock-picks rose 280%, 130%, 900%, 660%, 230%, and 450%.

• Just a few short months ago, I announced a Top Priority Buy on Eden Energy at the mid-$2 range – its shares went on a tear to the $10 level for a rapid fire increase of 280%.

• Earlier this year, I recommended Fellows Energy – its value rose 130% in weeks.

• I selected Ultra Petroleum below $1 – and within 12 months it shot up 900%…today Ultra Petroleum is a $7 BILLION market-cap producer with a share-price above $45.

• I recommended Pennaco Energy at $2.50 – and early shareholders witnessed a 660% increase as Marathon bought the entire company at $19 per share.

• I selected Atlas Pipelines – RIGHT BEFORE it skyrocketed 230%.

• I announced a “BUY” on American Oil & Gas – and in 26 months it jumped 450%

Now if you’ve been in the markets for a while you’ll no doubt already be groaning and rolling your eyes (or perhaps even crying), but for the less cynical this newsletter sounds amazing! In the email the stock being tipped to “double in value” was Ignis Petroleum (IGPG). According to the newsletter:

In the immediate-term, I expect the IGPG share price to DOUBLE within the next 12 weeks as the market begins taking inventory of Ignis’s incredible oil and gas potential in Texas, Louisiana, and Alabama . Then, sit back and watch the fireworks as this intrepid oil and gas explorer begins attracting expansive market attention.

And if doubling in value was not enough:

IGPG Could Skyrocket by More than 1000% in 24 Months

How has IGPG performed over the last year? The outcome is so predictable that perhaps the idea of The Natural Contrarian is that you should do the opposite of what is suggested in the newsletter! Closing at $1.49 on February 9th 2006 (when I received the email), IGPG opened trading today at $0.12 – an impressive fall of 91.95% and at no time after the tip was issued did IGPG go higher.

I did think that maybe I was being unfair to the newsletter, but a quick search turned up this article on Market Watch from 2003 where Scott S. Fraser’s long term trading record from the beginning of 1997 through to the end of November 2002 showed a 34% annualized loss.

So the next time you receive an email promoting the next hot stock: trust your instincts (or your spam filter) and just delete it