Hot Tips Are Not Hot Stocks

Ask Natalie: Hot Tips Are Not Hot Stocks. Subscribers chat with Natalie Pace.


Dear Natalie,

Have you done a report card on Aussie Soles, AUSE? What do you think of this company and its potential?

Thank you!
Cynthia

Hi Cynthia. Thanks for writing to me. Here’s a 5-minute analysis of Aussie Soles.
The first thing that I do when I’m researching a company is enter the stock symbol in the Company Research box on the home page at NataliePace.com. That takes me to the stock page. From there, I click on Company Report (located on the left navigation bar), which usually provides a description of what the company does. On the company report of Aussie Soles, there is no description available. It’s not available because the company is trading off the boards.

Companies that trade “off the big boards” are EXTREMELY HIGH RISK because they haven’t met the criteria to list on NASDAQ or the New York Stock Exchange. That fact alone will end my research right there, unless there is a very compelling story going on.
Wisdom Tree was trading off the boards when I featured it, as was U.S. Gold. Both companies had incredible executive pedigrees, interesting industries and products, and lots of money to launch with. All of these things have to be present and impressive to the nines before an off the boards stock looks interesting to me. And after a brief look around the Aussie Soles website, it looks like the founder, President and CEO, Craig Taplin, is the only person on staff!

So, at this point, I have more questions for you than I have answers.
Why are you interested in Aussie Soles? Did you get a hot tip from someone or do you just like the shoes? If you love the shoe and think it’s going to be the next great breakthrough thing, then you need to look deeply into the executive suite to see who is going to make it all happen. It takes experience and an outstanding marketing, sales and distribution plan to make anything the next great sensation!

If Aussie Soles was a hot tip, chances are that someone was paid to give it to you. Hot stock tips are usually expensive lessons, unless they come directly from Warren Buffett. The phishing and pump and dump scams are getting so sophisticated that agencies like the Securities and Exchange Commission and FINRA.org are constantly publishing Investor Alerts to foreworn you. In fact, be sure to check out the SEC alert that I’ve published in this month’s ezine, entitled, “’Wrong Numbers’ and Stock Tips on Your Answering Machine.”

I’ve started a topic on Aussie Soles on the NataliePace.com Sharing wisdom bulletin board, so that you can answer some of these questions. I hope you tell us more about why you are interested in this company, so that others can all learn from your experience. I think I’ve seen the shoes around, so perhaps you think you’re early on a fad? Could be! Very high risk, however, especially since we don’t know much about the founder/CEO and the rest of the team.