While the information and access which the Internet has allowed is amazing and of course irreplaceable, there are a number of caveats which come attached to that. One of the biggest humps to get over in the quest for information is the dreaded “false information.” This is of particular interest in public spheres like message boards, fan pages, etc…When you’re making investment decisions and you are doing your due diligence, one of the first places you may naturally consider to go is to the investor boards and stock-discussion pages. These are places you’ll find highly educated people who have a similar interest to you; that is making money in the stock market. Specifically if you’re dealing with an individual stock name, everyone on that board are all in the business of making money in that stock, right?
Well. One would hope.
The fact is that there are message board “pumpers” and “bashers” who are trying to tout or drive down the price of a stock for their own reasons. For this article we’ll address the issue of pumpers. Pumpers of stock on stock message boards can be just well intentioned folk who have a real concerted interest in the value of this one stock rising. They may be just sharing information which has not quite broken or gotten the attention it deserves. More often than not stock message board pumpers have their own aims in pumping up the value of a stock and it’s these aims which need to be analyzed and drawn into question.
Stock Message Board Pumpers: Getting Out: Stock message board pumpers get on the case of pumping a particular stock because they want to get out of the stock in question. While the ends may seem counterintuitive (why would someone want to drive up the price of a stock they want to sell) the fact remains that this is often the case. People all enter into stock at different levels; maybe the pumper of the stock needs the money for something or perhaps they’ve just waited too long and they need to exit. Maybe the online message board pumpers have inside information of some bad news pending and just want a short term pop in share price so that they can sell at a greater profit before what they know or think they know to be coming, breaks.
Stock Message Board Pumpers: Consider the Source: When you’re reading the information shared on online stock message boards, it’s important to consider the source. Many of these boards are policed by temperate individuals who quell both ends of the pumping and bashing spectrum. But if you read some awesome news and there are no verifiable URL links to real information, then you may be reading the words of a pumper. Do yourself a favor and check out the past history of the posting pumper just to see what they’ve had to say in the past. If their history is full of pumped up false-reality (news with no real movement), you can bet that you’re reading the words of a pumper.
Stock Message Board Pumpers: Paid: There is some colloquial wisdom floating around that there are paid stock message board pumpers. While there are undoubtedly marketing interests working for companies big and small, one really has to wonder what ends paid pumping has for a stock…Until you follow the trail of a stocks pumps in correlation with small rises in share price, unusually high volume, and no news. Then you see that paid stock message board pumpers are likely real and out there.
Stock Message Board Pumpers: Do It Alone: At the end of the day we each decide when to buy and when to sell stock. If you are in the market of investing it’s a good idea to consider all sources. Unverified enthusiasm from long-standing members of an online message board can be good sentiment. However you need real numbers and real information for stocks to really take off so if do read the message boards and you hear about some breaking news, take pause, take a breath, and before you go throwing money at the wall, do yourself a favor and see what else is going on in the world of real news outside the stock message boards.