Sound Advice!
Chappy's Stock Talk >>
This has been a very trying week. I have been mulling over what topic
I should write about, but have had few market-shattering ideas. In
hopes of being inspired, I decided to lurk among some of the small and
micro cap chat rooms to get a feel for the moods and opinions of
existing speculative investors. The prevailing theme echoed on many
different boards was that of anger for being misled or misinformed by
press releases that were placed on the wire -- or, in many cases, for
press releases that were not released at all.
This leads me to believe that many investors are valuing postings as
credible sources of information and are not, in fact, doing their
homework, nor are they consulting the advice and counsel of accredited
investment professionals.
Many of the common misconceptions voiced had to deal with news
announcements and the improper dissemination of them. Many people
seemed to feel that companies were either withholding relevant news
stories or only creating news for the purpose of "hyping" their
stocks. The US Securities & Exchange Commission was created to protect
the shareholders of public companies. As such, this governmental body
polices companies and holds them accountable to their shareholders via
a bevy of rules and regulations. Perhaps the most important function
of the SEC is to require companies to file for public disclosure all
material events relating to the daily operations of their companies.
Material information is defined as any information relating to an
event that may upon disclosure influence a shareholder's decision to
buy, sell or hold a stock. This includes events such as mergers,
acquisitions, quarterly and annual financial performance, the sale or
purchase of assets, increased liabilities, changes in management,
changes in corporate direction, litigation, et al. You get the
picture. Detailed information associated with these types of events
must be filed in a timely manner with the SEC -- all of which can be
accessed by the public. On-line investors can view these detailed
filings on the SEC's web site at www.sec.gov.
DO YOUR DUE DILIGENCE - and do not rely simply on company press
releases as your sole means of education. If you are fearful of a
manipulative stock scheme or getting trapped in a pump and dump scam,
review the filings and consult with a financial advisor. And,
please....do NOT place credibility in chat room rumors and the like.
It's foolish and very dangerous to your long term financial security.
If you have sensed the frustration in this article, you are very
observant. Through my chat room wandering, it was painfully obvious
that many disgruntled investors could have been spared a lot of
heartache by simply doing their homework. They were "blind-sided" by
some alleged skeleton in the closet that could have revealed by simply
reading through documents filed with the SEC. Remember,
sec.gov is a site to go for free access to these public
filings.
Good luck and PLEASE do your homework!
- Chappy |
