The obvious reason why message boards provide little in the way of credible information is because everyone who posts a message has a bias, whether bullish or bearish. So you will end up with an overly optimistic picture of the company, or an overly bearish. Somewhere in the middle is the truth.
Its not difficult to spend hours reading through the posts, many of which are quite entertaining, however, offer little in the way of useful information. Any info that can be culled from a bullboard can typically be found on the company's investor relations pages.
Another reason why bullboards are quite ineffective for your portfolio is the same as the biggest problem that has faced every forum since its inception: invariably, the internet has provided everyone with a soapbox from which to preach from, and most times its garbage.
Just as you wouldnt ask a complete stranger advice on which car or house you should buy, you should be weary of who you get your investment advice from. Whats in it for them.
That said, message boards can provide an opportunity for a small group of likeminded investors to trade ideas. After reading through tens of thousands of pages in the last 8 years, I have only found about 5 people who's opinion I would trust my hard earned money with. It took years of following their posts to understand their methodology, and establish a track record of effective trades.
Here are some other tips:
1. Watch for someone who posts on only one message board. Most investors hold several positions at any one time. We've all done our due diligence and are well versed on a company. If someone is posting on only 1 board, they may be there for a reason other than the welfare of your portfolio.
2. Watch out for the poster who continues to be overly bullish or overly bearish on a stock. Dont confuse enthusiasm with bullishness. The posts will be obvious.
3. Watch out for someone who continues to post that news is coming. While even a broken clock tells the right time twice a day, if someone knows that news is coming out next week, that may be insider info, or, they may be hyping the stock. If you are in a good stock, it wont need to depend on good news to prop it up. Anticipation of good news normally keeps those on the fence from selling, and that is what a message board scammer is looking to do.
4. If you notice that someone has a short history as a member of that message board site and they begin to post that they know all about the company, it may be time to put them on ignore.
5. If you find that someone is posting under different identities, its also time to put them on ignore.
The only information that you can take as truth is the nickname the person has used. After that, you have to judge their posts and eventually, you will notice who can be trusted, and who cant be.
There are stock market sites and blogs that tell you how you can earn from just a small cap investment. Of course, anyone who wants to get rich would understandably jump at the opportunity. But getting rich is not a quick scheme and no get-rich-quick books will tell you that it happens overnight. It does not happen overnight. Even if you think you have the most reliable penny stock listing in the world, it still does not guarantee financial wealth.
It is not about luck. Or else, luck simply has only a little to do with it. It's all hard work. There are even people who life a low profile lifestyle but have fat bank accounts. Then there those who claim that they got rich because they have a dependable penny stock listing and they want you to try it.
Don't get fooled by this hype. Today there are so many opportunists who would do anything to get a piece of your savings. The penny stock market is one of the attractive avenues for them. If you want to get rich from your penny shares, follow these tips:
- Do not overspend. Always keep in mind that the general rule of thumb is always to buy shares at low price. When the value appreciates and when the time is right, sell it. But do not use up too much of your savings. Just allocate portion of it. A safe margin would ten percent. And spend only for the list that you personally picked and not from those who suggested it to you.
- Learn the terms, the language, the slang, and the major concepts. Any penny stock listing is useless if you don't know how to translate them. And to do that, you have to understand the back and front ends. Along that path you will be encountering so many stock market terms that may be alien to you. Terms like the PE ratio, ticker signs, liquidity, etc. Understand them and learn them by heart.
- Commit your investment money reasonably. Your stock list is supposed to showcase the hot stocks to bid. However, the list can change overnight. What is hot today may not be hot tomorrow and that happens all the time. Always double check on which penny stock you think is most likely to expect profit for you.
- Read more and study the trends. Your penny stock listing cannot exist alone. It needs partners. Because in this business, the survivors are not the rich, the smart, and the strong. The successful investors are those who keep track of constant changes. These are the stock market trends.
In reality, what makes you rich is not because you have a penny stock listing that guarantees success. What success means is dependent on how much work you are willing to put in your business. The ingredients to success are knowledge, rational analysis, and a roster of facts. If you want to be rich is really all up to you.
Both Christopher W Smith & Malcolm Torren are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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