Remember Boiler Room? Or the Sopranos episodes where the Mafia was doing pump-and-dump schemes?
One of the stocks I owned, Rick's Cabaret, was just mentioned in a case like that. Coincidentally, I had just sold half of my position the day before to take profits after the big run-up.
The case doesn't look too bad for Rick's. Just because some Mafia guys allegedly traded the stock doesn't mean there's anything wrong with the company itself. But the valuation was getting pretty rich, so I sold the other half in the after-hours market last night. We'll see if the market spooks more on Monday.
Rick's, which runs a chain of strip clubs, was a good stock for me. I now have a new favorite sin stock, New Frontier (NOOF). It distributes pornography. It's profitable, growing, and reasonably cheap. What's more, it's likely to be added to the Russell 2000 Index in June.