A relevant post from DPGurney placed on AOL's Motley Fool "Post of the Day".
Good investing!
BigKNY3
Subject:Re: tmbs, rcmt, tsri
Author: DPGurney
"how come you folks dont post on the boards that the stocks are listed under?"
I suppose it has something to do with the regular followings found on most message boards of the Motley Fool--including this one, I suppose. The main problem with most of the boards is their total, almost fanatic belief that they are correct and the market is wrong. If the stock is doing well, they tell each other what a great company they have and how it will triple in the next month, blah, blah, blah. This doesn't really harm anyone--it just raises a lot of expectations that are almost never met.
The real danger in the individual message boards is when the stock begins to fall--herd mentality at its finest. At first the members tell each other how it is just a small correction. "The rocket ship will soon be blasting upward, just wait." After a significant one-day loss, the tone gets even more emphatic. "How can the market actually be punishing this company--don't they know its worth twice this much?" Around this time, people start the "I doubled my position today, what a bargin" posts. You can bet you'll find a number of posts blaming (take your pick) a) the analysts that follow the company, b) the market-makers, and of course c) the shorts for the recent stock performance. Also, one of the leaders of the board will call the company and post a detailed transcript of the conversation where the CEO states that nothing is fundamentally wrong with the company, so on, and so forth. This usually brings on another wave of buying by the regular members of the message board, as they finally burn up their remaining funds, or even worse, go on margin--throwing good money after bad on a losing proposition.
By this time, all rationality is gone (along with a good bit of money) and despair begins to set in. However, their pride won't let them admit the mistake they've made, cut their losses, and start looking for a better company to invest in. "Well, I don't actually lose any money if I don't sell so I'll just wait for the price to recover." By the way, Heaven help any non-regular member who drops by and states the obvious--this stock/company sucks--and recommends people get out before any more damage is done. I've watched people lash-out at RT, Edge, TraceBV, and others after posting logical and rational reasons why it might be time to begin looking to for another stock. It happens again and again--ATCT, ASND, RMBS, BRE-X, CYMI, APM, GNT, AOL, MU, CUBE, SLOT, COMS, AMGN, OXHP, ORCL, KLAC...
I probably speak for at least a few of us here when I say I'd buy a company that makes plastic dog crap--as long as the stock behaves and moves up. When things change and the stock begins acting badly I'll take my profits and move on to the next company. If for some reason the stock begins to fall apart immediately after I buy, I admit the mistake, sell, and take the loss before it gets out of hand. There are thousands of other stocks, no reason to fight the market and ride a loser all the way down. In this game, emotion kills. So to actually answer your question about posting on the individual boards--why bother? Most of us here will "git while the gitten's good" and move on and this isn't what the average board reader wants to hear. No point arguing with them, they usually don't listen anyway.
Mike |
