PRE PROMOTION STOCKS Review - Scam or Legit?

I'm sure you have heard of the Pre Promotion Stocks newsletter by now so i'll give a quick overview of their unique value proposition and then we'll talk about whether this trading strategy is a legitimate service or just another online hoax.

The concept of Pre Promotion Stocks is really, really simple. They send an email that tells you about penny stocks that are very likely candidates for near future stock promotions. For the penny stocks that do get promoted, Richard Appel's subscribers have the opportunity to buy before the paid newsletters start pumping the stock. 

In other words, his subscribers buy the stock in the "Pre Promotion" phase (before the stock promotion starts) and then sell it during the "Pump" (when paid newsletters start their campaign).

It's a very sound trading strategy… but does it work?

On the http://www.PrePromotionStocks.com website Richard Appel documents 5 trades that gained an average of 114.6% per trade:

• ETEV gained 24% over one weekend in late 2009;
• ARTS bought on January 4th, 2010 for a 157% gain;
• GRPR bought on April 15, 2010 for a 57% gain;
• ZLUS bought on May 7, 2010 for a 31% gain; and
• BLGW bought on January 27th, 2010 for a 170% gain.

(Like I said earlier, these 5 trades were documented in a video on Richard Appel's site).

But i'm a skeptic, and I wanted to go beyond these 5 trades so I invested $124 into a lifetime subscription of Pre Promotion Stocks (didn't have anything to risk, they have an iron-clad, no questions asked 100% money back guarantee).

During the past 7 weeks from July 10th - August 30th Richard Appel alerted the following "Pre Promotion Gems" (his highest level of confidence):

• SILA was alerted on July 12th at $0.77 and hit a high of $1.21 for a potential 57% gain;
• CRPZ was alerted on July 22nd at $0.28 and hit a low of $0.15 for a potential loss of 47%;
• HELI was alerted on August 16th at $0.062 and hit a high of $0.113 for a potential 82% gain;
• KHGT was alerted on August 23rd at $0.20 and hit a high of $0.40 for a potential 100% gain (then it collapsed back down to $0.20 for a break-even trade);
• MYNG was alerted on August 27th at $0.19 and it's unchanged since then.

Out of these 5 "Pre Promotion Gems" I received over the course of 7 weeks, 3 were big winners, 1 was a big loser and 1 was unchanged.

Hypothetically, if I started this 7 week stretch with $5,000 and re-invested all proceeds it would have turned into $15,144.22 (keep in mind this does not account for trading commissions).

And to give Richard Appel a bit more credit, all 5 "Pre Promotion Gems" went on to be promoted by numerous stock newsletters. Apparently he does know how to find upcoming stock promotions after all.

So there's my take on Richard Appel's "Pre Promotion Stocks". It's not a flawless trading strategy but it's far superior to James Connelly's Penny Stock Prophet. I did make a hypothetical profit and I always felt like his intentions were in the right place (he doesn't get compensated for picks, he doesn't use hype and he tries to explain all his rationale in great detail).

Hope this helps anyone out there thinking about investing in Richard Appel's www.PrePromotionStocks.com trading system.