FORUMS AND MESSAGE BOARDS
Wednesday, April 8, 2009
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In a brief conversation tonight, my mind quickly goes to the video that is currently posted on the blog, called the Anatomy of a Pump & Dump stock, by hotstockmarkets.com. It's a great synopsis of all message boards that have any regularity to them, and probably one of the most powerful driving forces to a stock.
I began a quest early on when I got involved in penny stocks, to see if anyone had any "insider" information (which I knew would have been illegal for anyone to disclose, but it never stopped me from looking). Then I found message boards...places such as Yahoo or InvestorsHub that give opinions, facts, and DD (due diligence). People fantasize about company earnings, speculate on new products, twist and turn company reports inside out....They are the soap opera of the stock market world.
My own personal rules on message boards:
- Nobody has inside information. Doesn't matter what they say, ip addresses are recorded and people can get into some serious trouble if they are caught (like Martha Stewart, ;-)
- Any data can be twisted to suit the messenger.
- The saying, "If it looks to good to be true, it probably is." Applies heavily to penny stocks. There are PR firms that are used to pump a stock up, and it's value. They disguise themselves as normal "Joes", some to "bash" (or talk really bad about a stock, and it's worthless value), others will pump (make it look like it's the best thing next to Microsoft).
- There are no easy ways to make money, so regardless of how much your particular stock will skyrocket, by the time you get to be able to trade it, it's too late. 300 - 400 - 500% baggers are rare, and difficult to predict. Chances are, if you make 300%, you will gamble to make 400%. And typically by the time the stock takes a downward turn, it's too late for you. Lock in your profits. When sideways trading begins to occur, jump ship. You will thank me.
I fell into this trap more than once. FMNTQ, HNSS, IGTP, others....TAKE YOUR PROFITS. Peaks, and high reaching peaks, are signs of reversal. Make this your rule of thumb, and you won't be sorry.
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