Star Scientific, Inc. (STSI), Vringo, Inc. (VRNG): James Altucher Doesn’t Want You to Read This

What did Altucher have to say about Star Scientific, Inc. (NASDAQ:STSI)? In 2011 he wrote that the company had “cured Alzheimer’s Disease” and was working on a drug that “blows away Lipitor.” (Lipitor is, of course, the best selling drug in pharmaceutical history.)

Altucher’s other darling stock pick — Vringo, Inc. (NYSEAMEX:VRNG) — hasn’t proven to be as horrible (yet), but remains a shaky investment at best.

The company was created via a reverse merger (a sketchy process that allows a company to circumvent a number of regulatory hurdles) and functions as nothing more than a patent troll — it buys patents and sues companies it believes are infringing on them.

In its recent annual report, the company admits that it’s a highly speculative investment, and that its business is difficult to evaluate:

We are a development stage company and we have generated no significant revenue to date. I/P, the accounting acquirer, was incorporated in June 2011, at which time it acquired patent assets from Lycos, Inc. To date, our business focused on the assertion of these patents. Therefore, we not only have a very limited operating history, but also a limited track record in executing our business model which includes, among other things, creating, prosecuting, licensing, litigating or otherwise monetizing our patent assets. Our limited operating history makes it difficult to evaluate our current business model and future prospects.

Altucher first wrote about the company roughly 13 months ago. In a post on TechCrunch, Altucher suggested that Vringo, Inc. (NYSEAMEX:VRNG) could ultimately bankrupt Google Inc (NASDAQ:GOOG). At the time, shares were trading under $2 — following his post, shares surged. But since then, it has been a rocky ride for shareholders, as the stock price has periodically surged only to collapse.

Last November, Altucher followed that up with another post, suggesting that Vringo could be worth $2 billion (it’s currently worth roughly $250 million). People had misinterpreted the Google ruling, he wrote. They didn’t just win $30 million settlement, it was more like $500 million verdict.

Maybe he’ll be right with Vringo, Inc. (NYSEAMEX:VRNG), and shares will surge 700%. But given that he claimed Star Scientific, Inc. (NASDAQ:STSI) had cured Alzheimer’s two years ago, I certainly wouldn’t count on it.

Altucher’s stock picks

Altucher says he gets 10 hours of sleep every night. Frankly, I’m not sure how. If I was peddling dubious stocks to my legions of followers, I would certainly find it difficult to sleep at all. But I guess that’s just me.

Investors can continue to enjoy his musings — they just shouldn’t follow him into any investments.

The article James Altucher Doesn’t Want You to Read This originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.