Investor trust

In the past when you were interested in buying some company stocks you had to call your broker (the one you trusted the most) and have your order goes through him over the phone.

Now, retail investors are facing many many more challenges.

We are actually getting access at the speed of light to news that are happening almost in real time. We are faced with high speed transaction and many sites where you can get information or dis-information.

So how can a retail investor trust the market?

The market by itself has not changed a lot: the companies that are making the most profit OR the one that can generate that profit will be rewarded with an increase in share price and the one lagging behind will get hammered. And with the internet or social media ones, profit is no longer a requirement during the first years but users is the new norm.

Nothing has changed. Well, almost nothing BUT

Rapidly growing is a bunch of individual currently named the pumpers and the bashers.

Those 2 categories are using bull board and social media to either destroy (or try to) a company and sending its shares to very low price or the opposite by trying to give attributes to a company that does not deserve it and propping the share value to some high levels.

I have even seen co-ordinates attack on companies with only 1 goal in mind: either profit by ‘dumping’ stock or profit by buying cheaply price stocks.

You can also get emails stating black on white which companies they will target and very often these are penny or sub pennies stocks.

The problem is that in both case the retail investor does get penalized and ripped of it's own money by either selling at a panic price or buying at an inflated price.

To complicate the problem, sometimes these people are associated with a broker or work in group to profit from those bad trades: by sending share prices very low, they can buy in at these levels and make a nice profit on the way back up OR by inflating prices, they can sell (dump) their shares at the high level and let the retail investor suffer the loss when share price goes back down.

There is multiple organisations that supervise or control such conduct and they are keeping their eyes open with their mandate to investigate any complaint they receive.

There is still some hope for the retail investor and it is called: due diligence.

ANYBODY that want to buy shares of ANY company MUST do some research by himself to confirm the value in the company he wants to acquire. DO NOT LISTEN to anybody giving you advices to buy or either sell. Buying AND selling is a personal decision and by relying on those individual to commit some of your money in a company recommended by them is almost suicidal.

Those bull boards are for entertainment only and can give you hints on how the company is performing. Many posters on those bull boards will have valid arguments as to why they think the company is performing or not BUT a lot of them will not.

These guys are easy to identify: no arguments either way. Only comments like 'This company will be a 5 bagger' or 'Game over for this company' and much much much ALWAYS without giving the reasons behind their advice.

Why would someone post on those bull boards (bashing or pumping) if they have no financial reasons to be there??? That does not make any sense.

They will try to tell you that they know the market; they want to save you money (or make sure you will make tons of money) and they all look like a scam.

Imagine that you would place an ad in the local newspaper stating’ How to make 1M$ by investing only in 1 company’ would you do that?

Would you sell your house on a so called friend that was telling you that the street where you bought your the house will be valued at 0 without any further explanation?

So why would you listen to those without arguments?

And what do you do if they are arguing about things and always finding the negative side of any good news or the best side of any bad news?

RESEARCH ON YOUR OWN.

Don’t try to be an expert on all companies you will be investing into but at least, go into reliable data sources, do some reading and when comfortable with it, hit the buy or sell button.

NOW: if you ever encounter what looks like a group of individual working together to bash or pump a stock and if you feel something is going on: FILE A COMPLAINT to the appropriate organization. Don’t accept these games and report them.

There are many scams over the internet and some of these posting groups can be linked to that.

Over the years, I have reported many of them and will do it again when I think it is needed.

Do not let those groups waste your time and your money. Investing in the stock market is STILL by far the best way to get some reasonable return on your money BUT you have to be careful. A lot more than before.