Penny stocks or micro-cap stocks are controversial. Though profit potential is high, they are very risky and prone to fraud. Since he is in this field, many people ask if Alex Koyfman's Microcap Insider is a scam.
So is it?
Well, the answer is much more complicated, so do stick around as we will go deep into the service.
What we can acknowledge for now is that even the editor and his publisher might be aware of the issues. See, from Penny Stock Millionaire, they renamed it Microcap Insider.
Now, why would the marketing team choose a much more vanilla title? For sure, the former has more oomph. Imagine, the words penny, stock, and millionaire in one phrase? That's a copywriter's heaven.
Want to know why?
Well, continue reading as we will discuss this and more. In this review, you will get all the information you need about Koyfman, his service, and if it is worth subscribing to.
- Name: Microcap Insider
- Editor: Alex Koyfman
- Publisher: Angel Publishing
- Website: www.angelpub.com
- Service: Weekly Investment Advisory
- Cost: $3,999
If you are interested in the cheapest stocks available out there, you might want to try out micro-cap stocks. Based on the name alone, you would already know what they are about: small-scale companies.
Microcap Insider specializes in these types of investments. Koyfman says that he can give you specific action steps every single week. He will recommend penny stock investments that can give you explosive gains.
Since he also recognizes that the risks and volatility inherent here, he says he will not only tell you what to buy and when.
Part of his deal is telling you why his recommendations make sense. His goal is to give you confidence in your investments.
This is also the reason why this particular service is focused on tech and biotech. For him, these are the sectors of the future, given all the innovation happening around the world.
Since he knows how to spot future winners in these areas, he is certain that he can help you reach your financial goals. All that you need to do is have faith in him and his stock picks.
Of course, since he promises "triple-digit knockouts", the service is not going to be cheap. Angel Publishing gives it a hefty price tag: $3,999 for a one-year subscription.
Yes, you read that right. Three thousand nine hundred ninety-nine U.S. dollars.
So, is this a classic case of "you get what you pay for"? I mean, if it can generate you high returns, it will be worth it in the end, right? Since the price is this steep, it must be worth it, right?
Let's find out together, as we also want you to make a wise investment decision.
DO NOT be pressured by the red timer at the top of the marketing page. It always renews so you don't need to subscribe right away. You should know that a good number of publishers use this disingenuous tactic.
We keep repeating this reminder as we know that this strategy still works. Unfortunately, those in the demographic that most publishers target fall for these.
Since most of those who are more advanced in years are not tech-savvy, they think the offer will really expire when the timer turns to zero.
So, again, research more before clicking the subscribe button.
What is Angel Publishing?
Angel Publishing is an investment research publisher that focuses on technology, energy, and biotechnology. It believes in the potential of these three areas to provide its subscribers financial freedom.
It also admits that its experts are speculators who agree that the future is uncertain and therefore, unpredictable. As such, they employ "unconventional moneymaking strategies" to survive and thrive given the circumstances.
To be effective in this type of investing, the editors and staff are always up-to-date on world events. They know that a lot of economic and market activities hinge on political movements.
All the editors can help their subscribers because these experts are among the best in the business. At least this is what they advertise on the company's website.
If you make a quick scan of the editors and their services, Angel Publishing claims that you would be able to see what differentiates them from competitors.
It says it does not follow the crowd. Instead, Angel Publishing adheres to contrarian investing strategies. It looks inside obscure places.
If people are going left, its experts go to the right. Their goal is to spot unpolished gems so you can go in early. Since you will be among the first to make a move, you can gain high profits from your investments.
Much of the direction of the company comes from the team members. Here are the people behind the publishing house:
- Brian Hicks
- Christian DeHaemer
- Jeff Siegel
- Keith Kohl
- Jason Williams
- Alex Koyfman
These are the services offered by the publisher:
- Green Chip Stocks
- Technology and Opportunity
- Main Street Ventures
- Bull and Bust Report
- Launchpad Trader
- Energy Investor
- The Wealth Advisory
- Alpha Profit Machine
- Microcap Insider
- IPO Authority
- First Call
- Weekly Score
- Topline Trader
- Real Income Trader
- Wealth Trust
- Energy and Capital
- Wealth Daily
Who is Alex Koyfman?
Koyfman initially wanted to build a career as a lawyer. In fact, after getting his bachelor's degree from the University of Maryland, he attended law school at Penn State.
However, his interests just came out naturally even while studying. At that time, the editor claims that he traded Vmware, which gave him a six-figure gain.
We remember another investment research figure who has the same background. In our article on Bill Bonner, we said he also attended law school. However, he did not feel that it was the right field for him.
Despite graduating from Georgetown Law, he entered the field of financial advisory. Now, he heads The Agora, arguably the biggest in the industry.
We can't help but wonder if there is a connection between the two. One advantage we could think of now is that lawyers would know best how to play with the legalese of financial education versus advice. But we digress.
Going back to Koyfman, another milestone in his early trading experience was with WorldCom. He says he made six figures as he bought shares at 7 cents and sold them at 35 cents. This proved to be the deciding factor.
He continued learning more about both tech trends and micro-cap stocks. Finally, in 2009, he left his law practice to go full time into trading.
He went on to create a weekly financial blog. At its peak, it was reaching up to 100,000 subscribers. This is not bad at all for an independent writer like him.
Eventually, he started Penny Stock Millionaire. He soon renamed it Microcap Insider.
He also claims to have created a "unique de-risking method and scientific approach to stock trading". This is the result of his world travels and on-the-ground testing of his investing ideas.
What are Penny Stocks, Exactly?
Penny For Your Thoughts
Headlines like the one above are persuasive. What a lucky fellow! Imagine turning $1,500 into $1 million in three years? Indeed, this is every investor's dream.
According to the CNN Business article on Tim Grittani, he started at the age of 21. That small amount was all that he had at the time.
What's most interesting about the whole ordeal is that he did not get involved in traditional big-ticket companies. I mean, how could he even do that with $1,500, right?
Instead, he chose to invest in small, peculiar items called penny stocks. The 2013 article classified these then as "very small companies that typically have a price below $1".
Today, according to a more recent 2021 penny stocks article from Forbes, it's a bit different. As per the Securities and Exchange Commission (SEC), these are "stocks that are traded for less than $5 per share".
Grittani clarifies though, that it was a long, arduous process. Since he was dealing with micro-caps, he would go in and out of certain stocks in a matter of minutes.
According to his recollection, because of the constant swings in the market, the longest he has ever held on to a stock is a few days. As a result, he said he was literally in front of his computer trading every single day.
The article is also cautious about telling people to invest in penny stocks. Even Grittani's mentor, Tim Sykes, said that this is not for long-term investing. You should not do this as a way to build your retirement fund.
This is because this kind of investing is extremely risky and volatile.
You know how experts always say that when you invest, you only do so with money you can afford to lose? Well, take that kind of care and caution, then multiply it by 1,000. That's how risky this is.
Moreover, the 2021 Forbes article we mentioned even has this as an opener:
Penny stocks are a class of low-price, high-risk public companies. They tempt highly speculative traders with the illusion of easy exponential growth, offering the chance to double, triple, or quadruple their money. Don’t be fooled—penny stocks are incredibly risky, with a very high potential for fraud and loss.
Also, these are generally traded via "over-the-counter (OTC) transactions, or on the electronic OTC Bulletin Board (OTCBB) system". Most of them are not on major stock exchanges.
The write-up also lists four major issues with these micro-cap investments.
First, it is prone to fraud. Such a scam is what's called a pump-and-dump tactic, as portrayed in the popular movie, The Wolf of Wall Street.
How does it work? Those involved in the scheme trick vulnerable investors to put money in penny stocks. They promise huge returns after a certain date. As others also see the stocks go up, more people are enticed to join in on the fun.
This, in essence, pumps up the price.
And when it reaches a certain ceiling, the fraudsters dump all of their shares by selling them.
As a result, the stock collapses. Investors who were pressured to buy them in the beginning now have stocks that are worth nothing. Sadly, many people fall for these scams and lose their hard-earned money.
It is these kinds of schemes that convinced Travis Johnson to create his website. Our article on Stock Gumshoe details how some newsletters are actually tools of sketchy investors.
He said that though some stock promoters are the real deal, most are not. Some offshore traders even get involved to pump up shares of stocks.
The second red flag on these is the high price volatility. When things are good, you see great gains.
For example, a rise from $1 to $2 does not seem like a big deal. But if you really consider its implications, you are actually looking at a gain of 100%.
In the same way, things could go south at a glance.
Third, Forbes talks about how legit the companies really are. This is the downside. With much bigger businesses, they are required to submit loads of financial information. You would know what you are dealing with.
However, with micro-cap, the bar for transparency is much lower. This means you will invest blindly or you would be the one to do all the necessary research work.
Since most do not know how to do the latter, they end up doing the former.
Fourth, there is a chance you would have great profits on paper only. This is because trading volumes with micro-cap are very low.
With other much bigger stocks, there is a constant exchange happening everywhere because people continuously buy and sell them.
Here, there is only a limited number of buyers and market makers. If no one wants to buy your shares, nothing will happen.
Alex Koyfman, in fairness to him, is straightforward when it comes to this cloud surrounding penny stocks. He says it has gotten a bad reputation may be partly because of the "penny" in the name itself.
To most people, it just connotes that something lacks value or is worth nothing at all. For us, though not directly alluding to the name change from Penny Stock Millionaire to Microcap Insider, that speaks a lot.
One, even he has seen the issue with the word usage.
Two, penny stocks have also had an ill reputation in recent years. So why would he stick with the name? Since these are rational reasons, we assume that these are the main reasons behind the renaming of the newsletter.
He counterpoints as well that microcap companies have a unique value proposition. For him, this brings the experience to the masses. It is the only chance for non-accredited regular people to invest in the early stages of companies.
As we were researching on the subject, we came across a press release from the SEC. The 16 August 2021 article has the headline: SEC Charges Penny Stock Company, CEO and Others with Multi-Million Dollar Fraud.
According to the complaint, GPL Ventures bought more than 1.5 billion (yes, that's a B) shares of HempAmericana Inc. stock. The transaction was made through a Regulation A offering.
The allegation is that there was an understanding that HempAmericana will use part of the proceeds for promotions. With this setup, GPL Ventures would then be able to share their stocks at a profit.
SEC says that this is an act of misleading HempAmericana's investors. The company even hired a stock promoter who did not disclose that HempAmericana was the one who paid for the promotions.
GPL Ventures and some of the defendants earned about $11 million in the scheme.
Another allegation in the complaint is that GPL Ventures and allied entities were operating as unregistered securities dealers. They also "privately obtained discounted stock in more than 140 microcap issuers".
How much did they make from this? An additional $81 million, as they allegedly resold the stock "to the investing public at a substantial profit".
This is a classic pump-and-dump scheme in action. We are glad SEC has acted resolutely in the matter to protect everyday consumers and regular investors.
The case is a clear example of why you should always practice due diligence in your investments, penny stocks or not.
As we have already mentioned, if you do not want to research on your own, Koyfman says that he will do the bulk of the work. But even with his research, he still encourages you to find out more on your own.
Tips and Tricks
A Business Insider article offers readers advice on how to protect yourself in these kinds of investments. Here are some of them:
Only buy the best
Choose high-quality companies with rock-solid balance sheets.
Avoid "dark markets"
As much as possible, do not make over-the-counter transactions.
Use established brokers
Your broker must abide by the SEC's rules.
Do your own research
Do not just trust what you see or hear from "experts". Try to find credible sources.
Only invest what you can afford to lose
Do not put all your investments in penny stocks.
Before we proceed, what are your thoughts on micro-cap companies so far? Are you inclined to still try investing in this area given what we have discussed so far?
What is Microcap Insider?
Alex Koyfman asks you to take the plunge and make the risk.
His specialty is on tech and biotech companies with a $50 million to $300 million market capitalization. In the stock market world, these are tiny. To provide contrast, the market cap of Microsoft, Apple, and Amazon is in the $2 trillion area.
So this is the chance for regular investors to invest in companies before they grow. This requires very little capital so people should take advantage of this, he says.
According to him, the reason why people do not succeed in investing is that they are too afraid. Some form of caution is healthy, of course. But he says when it is taken to the extreme, you will never get the wealth of your dreams.
Koyfman is even bold enough to say that when you subscribe to his $3,999 newsletter, you will understand. Even if the price is steep compared with other services, you are bound to get your money's worth.
His system, he says, wipes out 99% of your chances to fail.
Well, isn't he such a miracle worker? Imagine, knowing how risky and volatile microcap is, yet he says he can almost guarantee that you will only gain from his recommendations?
Is this even possible? Let's examine how exactly he intends to do this.
How it Works
As we read through his marketing materials for the newsletter, there was almost no mention of his process. We think this is a missed opportunity.
Since he is promising an almost perfect guarantee plus a steep price, it would be helpful to know specifics. As we have mentioned, this area needs more and not less sunshine, since penny stocks have quite the reputation.
In our effort to know more, we were able to find a video on MoneyShow where Koyfman talks about it, albeit in passing.
He said that he has a "derisking plan" that will benefit his subscribers and readers. The first consideration is to ensure that the company you will invest in has cash. Also, it must have a sustainable business model.
Another thing that Koyfman checks is the management team. He looks at their track record and experience.
According to him, once you do these steps, you already remove about 90% of the bad apples.
Even if this is the case, he adds a disclaimer. Any form of investing still involves risks so you still do not want to put too much of these in your portfolio.
In addition, when he recommends stocks, he also tells you when to get out, since timing is a huge component of success in micro-cap.
We believe this approach is not novel to Microcap Insider or Koyfman. It is the typical strategy employed by speculators like him, the other experts at Angel Publishing, and even a "legendary investor" like Doug Casey.
He, in fact, is considered as the authority on "rational speculation". We have discussed this at length in our article, The Casey Report Review – Our No-Holds-Barred Guide.
In evaluating stocks, Casey looks at eight Ps to determine if a stock is worth investing in. These are people, property, phinancing, paper, promotion, politics, push, and price.
Though Koyfman did not exactly cite all, we see commonalities, since speculators often look at the same things for the most part.
If you want to see more details on tools speculators use, you may read our review of Casey's newsletter.
What You Get
With that price tag, we are sure you are expecting top-quality updates and research from Koyfman and his team.
Here is a list of the standard inclusions:
- Microcap Insider Weekly Issues
- Since time is a crucial element, he will send you his newsletters every week, unlike most advisory services.
- Real-Time Buy and Sell Alerts
- Koyfman wants you not to miss any opportunity, so he will send you updates as they come.
- Specific Entry, Exit, and Target Prices
- Microcap Insider promises specific instructions so you won't have to guess anymore.
- Complete Research for Every Recommendation
- Since Koyfman also wants you to be confident in penny stocks, he will exert an effort to give you a deep analysis of his recommendations.
- VIP Service
- A team is devoted to answering your questions, you just need to call the company.
Microcap Insider also adds seasonal special reports. For this specific period, there are three bonus issues:
- Maximum Microcap: The Insider's Guide to the World's Fastest-Growing Stocks
- Microcap Mastery: How to Turn Every $10,000 into $2.73 Million
- The Penny Stock Quick-Start Guide
Cost and Refund Policy
The annual subscription for Microcap Insider costs $3,999. Make sure you read the fine print as it auto-renews every year.
According to Koyfman, he is giving you a risk-free trial period. You can try his service for a whole 90 days, with all the complete features. If within this time, you determine that it is not for you, just inform his team.
Microcap Insider will return your money immediately, no questions asked.
Track Record and Reviews
In Stock Gumshoe, Microcap Insider was able to get a rating of 2.6/5 from around 50 votes.
We also saw the comment below which reinforces our point about the importance of timing when it comes to these stocks.
Based on the experience of the subscriber, s/he did not think the price was justified.
The offer s/he mentioned has a $999 price tag probably because of a special promotion. So if s/he was hesitant on that price, how much more for the original price.
Again, we would like to reiterate that such comments do not represent all subscribers. We feel we always need to state this so you will have better context on the feedback that we post. Each person's experience varies.
For his part, Travis Johnson of Stock Gumshoe thought the claims of Koyfman in his Plastic Killer teaser were not realistic. Koyfman said that the company he was referring to "could rise as much as 6,896% practically overnight".
When he found out that it was NEXE Innovations, Johnson was not convinced. Based on his research, the signs for immediate growth were just not there.
Green Bull Research has also reviewed some of Koyfman's teasers before.
We looked at his promo for the "Oil Killer" that could give you 10,000% gains in a matter of years. Our verdict on it was at that time, it was too early to say that such yield was likely. The projection was too optimistic.
In our article about "The Amazon of Uranium", we also practically said the same thing. How could we not? The promise then was that "you could position yourself for a 29,594% revenue surge in possibly a few weeks".
We did acknowledge the potential in the stock he was teasing, which was Energy Fuels Inc (UUUU). But we just could not give credence to such sky-high claims.
Pros v Cons
- Potential for high rewards on big upswings
- Koyfman has experience in these types of investments
- The newsletter can be useful for those intending to invest in penny stocks since such companies have a low bar for financial reporting
- Micro-cap companies or penny stocks are volatile and risky
- Investors need to proceed with extra caution to avoid scams
- Lacks explanation on how he can exactly help you navigate through such investments
Conclusion - Big Gains from Micro-Cap Stocks?
So, do you want to be a penny stock millionaire? Or if the editor would prefer to put it, a micro-cap insider?
Well, in that case, you need to be prepared to read and research more. Expect to feel the need to constantly check your investments a lot more frequently as well. Oh, and you might need to make sure your blood pressure meds are easily accessible.
Just to be clear, we are not trying to scare you away from investing in these types of companies. In fact, the newsletter we are reviewing here aims to educate and encourage more people to try them out.
Its editor also says that due to his process and expertise, you will have 99% of success. He is so determined to help you succeed that he will contact you more frequently so you always get the perfect timing.
Since the reports you will receive contain his research plus analysis, you will also gain confidence in this type of investing.
Are we convinced that you will only have a one percent chance of failing? No, obviously. But if you want to learn more about micro-cap companies, we agree with the fact that it is always better to have more information.
And this is what he is offering.
However, we still encourage our readers here to research on their own. Do not just rely on the words of so-called experts. You never know what their ultimate agenda is. So you have to take care of yourself.
We also want to temper your expectations because of the risks involved. We want to remind you to never invest more than you can afford to lose. Yes, the upswings are enticing, but the losses can also be devastating.
This is why you see a lot of other experts who encourage everyday investors to steer clear of penny stocks.
So at the end of the day, it is up to you. If you can afford the subscription fee and have a few dollars you can "gamble away", it might be good to try. But know all your risk exposure first.
So, is Alex Koyfman’s Microcap Insider a scam? Well, he does offer a legit service from an existing publisher. The final answer probably would depend on how much you believe him and his recommendations. But we hope this review gave you enough information that can help you answer that question on your own.