I figured that it was only a matter of time before something like this happened, but I don't think it will have a major visible impact on anything.
The reason I say this is because often what people believe to be the truth, and what is actual, are on opposite sides of the universe. Some myths are often accepted as CONVENTIONAL WISDOM by the masses, but it still doesn't make them fact.
For example, some people have said that in their opinion, a trade is only legit if the stock is purchased from a licensed broker, and that any stock purchase made directly from the company would be shady at best. That is CONVENTIONAL WISDOM. However, in actuality, direct purchases are commonplace across the market, especially in the form of DRIP (Dividend Reinvestment Plan) accounts, which are not only legal, but also encouraged. Besides, why should people be required to pay a commission to purchase something when they don't have to?
Also, CONVENTIONAL WISDOM dictates that a paid promoter is required to identify themselves as such. However, the only entity that a paid promoter is required to report anything to is the IRS, and only to the extent of reporting the compensation as income. It is, however, a requirement of the company, to report to both the IRS, (in the form of a 1099), and to the SEC, in the 10K, a list of all individuals and/or entities who were paid or otherwise compensated to promote their stock.
Of course, the more ethical promoters do not try to hide it. Also, those who are paid shills for companies, or otherwise compensated hypesters, are quickly found out. Just a few years ago, a paid promoter would have been good for no more than a run of one or two stocks, ending when their credibility was lost. In earlier days, things were on a more level playing field, as a paid promoter had little to gain by staking their name and reputation just to run an otherwise worthless stock. It just wasn't worth the risk, as once one's credibility was gone, it could never be regained. Again, ONCE ONE'S CREDIBILITY IS GONE, IT CAN NEVER BE REGAINED.
The development of the internet, and its implementation in the trading process forever changed that statement. The internet actually breeds corruption into the trading process, by allowing an instant identity change. When one loses credibility, they simply get a new name. (or two...or ten) This is to the detriment of the individual investor who relies on the internet as a source of dd, in my opinion, as it contaminates much of the information that is out there. The internet is cancerous It reduces stock threads to virtual cesspools of manipulation in both information and trading practices. Nonetheless, it is here to stay, and that will never change.
Therefore, knowing that much of the DD available on the internet is "contaminated" by the internet itself, people are forced to depend more on their own common sense and instinct if they want to succeed. In my opinion, this scares people, whether they will ever admit it or not. It is fear. It is what produces the nasty reactions when the thought of common sense is presented to someone who is obviously not using it. In the scope of trading. it is a result of a lack of confidence in one's own ability to make an intelligent decision regarding a stock. Rather, it is much easier to depend on someone else for dd, and then blame them when it does not make them a million dollars. It is the path of least resistance, and used by many.
The most important thing to remember, in my opinion, is that conventional wisdom often differs from actual fact and common sense. When it comes to my money, I will always go with the latter.
Just My Opinion,
:-)
Binder |
