I use this method myself, and so do alot of gold sellers out there. It's not necessarily JUNK buying. I wouldn't advise using broodoos or poisoned stuff or you will end up with the above situation, a bunch of JUNK that won't sell. But if you choose items that are falling a bit from their natural fluctuation, then they will easily sell back within the next few G.E. updates (few days tops)
The only problem with this method for me is that because you only gain 5% of the money invested, you must have 20 times the gold on the sending account for how much you xfer (assuming you dont want to wait til stuff sells again at least 4 hour late). So to transfer 5M, you must have 100M gp, 10M is 200M and so on so if you are into gold selling, this factor of the method could greatly hinder how much you can sell at one time.