How to Multiply an Investment by 1000
August 17, 2026
by William P. Meyers

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Fraud is the key

Let me begin by noting that some legitimate investments can, over time, return 1000 times the original investment. Turning a single restaurant into a nationwide chain, like McDonald's for instance, or providing a software service that becomes extremely popular, like Microsoft did. Such returns are not even rare, though they are a tiny percentage of the total investments business people make. This essay is about the fraudulent investments that make a return of 1000 (or sometimes just 2, or 10, or 100, etc.). Again, there are more ways than one to do this. I will dissect the most common method.

Most people are familiar with how auctions work. An item will be sold to the highest bidder. If there are a lot of people who would like to own the item (say, a ceramic hippopotamus), the bid price will rise rapidly at first. As the price gets higher people will drop out. If two bidders are determined to win the auction, the bid price, and final winning price, will likely go beyond the normal value of the item. Someone who already owns a ceramic hippopotamus, and needs some money, may get excited and try to auction off theirs. The results of auctions on such items typically varies greatly from auction to auction.

Brokers who run the auctions typically get a percentage of the sale price. If no one bids at an auction, or only one person bids, they get much less for their share than they would if there were a bidding war. So it is not unknown for them (in a IRL auction, with the bidders in a room) to plant a shill. The shill bids, but tries not to be a top bidder. That drives up the sale price.

Since pretty much everyone knows that, it is also possible for the person whose item is being auctioned off to pay for the help of a shill. In fact, they have even more of an interest in artificially driving up the price.

Extend that to, say, an online auction. The seller might work with a shill, or even pose as a distinct online presence, in order to spike up the bidding.

Now consider that and apply it to the stock market. A large capitalization stock like Nvidia might have hundreds of thousands of shareholders, with thousands buying or selling on a given day (or small time frame, like one minute). Smaller, less known companies have fewer owners, fewer traders, and trade less often. What are called small cap and micro cap stocks may have only a few people, or none at all, buying or selling during the course of a day.

The fewer the trades of a given stock, the more it might seem to need a shill to keep its price up. In fact there is an honest roll here, the class of traders (now mainly replaced by computer programs) known as market makers. The role of the market maker is not to jack up the price. Instead their role is to smooth the market. Someone wants to sell, but there is no buyer. The market maker buys. If there is a buyer, but no seller, the market maker sells. Market makers gain small amounts of money from very slight differences in prices. The SEC (Securities and Exchange Commission) monitors market makers. They can lose their licenses to trade if they engage in any funny business.

The most common form of stock market funny business is jacking up the price of a stock. Any number of players may participate, but for this example I will use just two. The stock could be a good (money making) company, or a loser (likely on the road to bankruptcy). Two traders with relatively large amounts of money collude. Say the stock has been trading at $10 per share, in line with its fundamentals (profitability). Player A bids $10.25. So someone sells to Player A for 10.25 (and is happy to get the extra 0.25). Player B then buys the stock, same number of shares as Player A, for a higher amount (mostly like $10.20, but to save some tedious storytelling, say $10.50).

Player A and Player B go back and forth to some mutually agreed upon goal, lets say $19.90. The hope is that other traders, seeing the action, think there is a real, but not yet revealed, reason the stock has risen to $19.90. So one (or more) bid, say $20.00 and get all of the Players stock. The Players bought stock at $10, sold it at $20.00, and doubled their original outlay. Maybe in a day, maybe in a week, may in few months. That is a great return on capital.

Keep in mind that sometimes a stock is truly undervalued by the market, and doubling (or some other multiple of its prior price) the price is just bringing it back to fair value.

It can be hard to distinguish the manipulations of our Traders A and B from a less-contrived bidding frenzy. You see these happen in Wall Street movies, because such frenzies happen pretty often in reality. Many people get excited easily and trade on momentum, not fundamentals. Sometimes the fundamentals change suddenly. Some traders short stocks they think are overpriced, then leak out the reason they think a company should go down.

What can double can quadruple, or to up by a factor of ten, one-hundred, or one-thousand.

As an example of multiplication without any (obvious) market manipulation, consider Nvidia (NVDA). Today it close at $225.01. Five years ago it was at $22.12. So multiplied by a factor of ten over 5 years.

Now consider cryptocurrency. The SEC in the past did not regulate cryptocurrency, so it was open to market making. Two rich persons, or groups, could manipulate the value easily, and secretly.

Using the first cryptocurrency as an example, Bitcoin, let's go back ten years. On August 20, 2016 it was traded at $573.20 per Bitcoin. That was in itself remarkable, since the crypto was only auctioned to the public (mainly drug dealers) in 2009, when it was first valued at $0.10.

So between 2009 and 2016 the auction value of a Bitcoin was increased by a factor of about 5,730. Sound fishy?

Then between 2016 and today, when it stands at $64,350 per coin, it has gone up by a factor of about 128 thousand.

Then again, after hitting a peak of about 124,784 earlier this year, it has lost half its value, if you use the auction prices as the values.

No one knows what will happen next. One of the big-time Bitcoin scammers, I mean investors, might decide to unload a large number of Bitcoin, causing the price to plunge.

Who knows, maybe the price will drop back down to $0.10 per coin. It will become one of the marvels of popular economic or investment history books, like tulips and Enron.

Meanwhile, others have tried to duplicate the scam. The $Trump cryptocurrency is trading today at about $1.40 per coin. It peaked at $75 per coin shortly after launch.

Oddly, just a few years ago, before the AI boom, one of the main uses of Nvidia graphic chips was to "manufacture" Bitcoin.