Classic Scams - The Long Con

I got this spam email today and it reminded me of a classic scam to raise money for a hedge fund. Here is the email:
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><font size="2">China: The World's New Engine for Growth

Everywhere smart investors have been accumulating positions in China
related equities, with the knowledge that this vast new market is no doubt the place to be for eye-popping profits.

And today's profiled company Ever-Glory International Group, Inc is no exception:

Stock Symbol: EGLY

Current Price: $2.76
Short Term Target Price: $5.95

THIS ONE HIT ITS ALL TIME HIGH AND IS UP OVER 200% IN THE PAST
WEEK!....YOU WONT REGRET THIS ONE!

Ever-Glory International Group is an American public company engaged
in international business and garment manufacturing mainly for high grade well-known casual wear, outwear and sportswear brands such as Reebok, North Face, Levi's and more.

It has a wholly-owned subsidiary company in mainland China- the Nanjing Goldenway Garment Company, Ltd.

The company has over 700 team members, total assets US$7.5 million,
and annual revenue of approx. US$8 million.

KEEP YOUR EYE O/N Ever-Glory (EGLY), IT'S GOING TO EXPLODE!!!</font id="size2"><hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

The scam goes like this:

They start off with an email list of 1 million investors. On Sunday evening they send a message that the market is going up to half of them and the other half a message that the market is going to go down. The following Sunday they split the winning list in half again and send out the same message - in other words discard the half of the list which they told the wrong story to. The Sunday after that they do the same again... and again... until they're left with a list of a few hundred to maybe a couple thousand people who have heard them give a 100% correct call for several weeks in a row.

Now they send this small list an invitation to invest in a fund that they are about to launch. After seeing such a stellar performance from their calls they're likely to get a few takers.

My advice:
If you see something like this happening then forward the email to the regulatory authorities immediately and tell them of your concern.
Let others know about the scam by posting messages on forums like this.

A good write-up on the Long Con and how it was used during the Football World Cup: How to Flawlessly Predict Anything on the Internet. This is the Long Con as described above which is now easier and easier to pull off with today's technology.