BEWARE of Spammers.!!!

Hello Investors once again,

       As I told in earlier post, retail investors need to be aware of the spammers, as when they recommend any stock, the stock will move unusually and unexpectedly. Promoters may offload their stake and many other operators can take advantage of such SPAMS.



Now, How to check whether the stock recommendation is SPAM?

Frankly speaking, there is no appropriate way to check whether the recommendation by anyone is spam or not as everyone has different and contradicting views when asked about a particular share. What we, as a retail investor can do is check on Google whether the info provided in a spam message is true or not. But never be greedy and never listen to an unknown source as you are investing your hard earned money. And ya if you have xtra money, you can always contact me for investment related ideas ;)


e.g. Nowadays, Dolly Khanna is considered among the best investors as her investment in past 1-2 years has earned most than any other big investor. Spammers will post a message on MMB saying that Dollly Khanna is buying this stock. Now we cant judge if the message posted by him was true or not. 

Real Life example: I am bullish on Usher Agro stock. Have been accumulating it on dips and I feel that it is a perfect multibagger. It has showed all the signals that is shown in 'Multibagger in the making'. Someone posted a message that Dolly Khanna has started investing in it. As any normal investor would do, I felt that was a spam as there was no way I could get the right information unless the shareholding pattern for next qtr was rolled out. Shareholding pattern for Dec 2014 was rolled out and investors saw that there was no stake of Dolly Khanna. Some investors bought the stock just because Dolly Khanna invested. Now as Dolly Khanna was not ther in shareholding list, they might have sold the stock affecting the technical and chart pattern of the stock. Thus it creates a wave on uncertainty in the message board.

In another case, I track Asian Granito Ltd company from the levels of Rs 30.00 and have invested in it regularly on dips. I am super bullish on the stock even now. As I track AGL regularly, one day I found that there was one guy who wrote that Dolly Khanna is investing. Again I felt that was a spam as there was no way I could get the right information unless the shareholding pattern for next qtr was rolled out. And there it was. I was surprised as the guy was right and Dolly Khanna held 1.69% of stake in recent Shareholding pattern (Dec' 2014). This doesnt mean I am going to believe each and every boarder.

 Many boarders on MMB have successfully fooled investors and poor investors have lost tons just because of SPAM...

e.g. of such shares:
Via MMB: Syncom Formulations, Madhav Marbles, Jagsonpal Pharma.
Via Personal messages/Whatsapp: NHC Foods,Aurum Soft
    
Having said that, if you are an investor and using MMB service, then you might have noticed that in last week(date 20 Jan-25 Jan), the boards were flooded with the recommendation of BUY on 'Richa Industries'. I am not saying that the company is bad or it doesnt have future but if we have spammers activated like that on particular board, the stock movement becomes unexpected due to which investors might suffer huge loss. 

I tried so many times to warn investors on all the boards on MMB where there was possibility of spamming, but there are so many supporters of the Spammer that noone listened me and criticized me. Most of those who comment are his paid followers only but retail investors are unable to see it. Due to this, even retail investors used to ignore my sincere comments. All of them will regret they didn't listen me before when the quarterly results will be out. Once the results are out and its below expectations, The Spammer who has lot of followers will just leave the board. Check Syncom Formulations, a classic example.




Consequences: The main thing to look out for is that if promoters are not trustworthy, they can sell their stake in such conditions when there are many more buyers available than sellers as they sell in chunk. It has been noticed in many of the shares where the share price is inflated with the help of spammers/operators and when the price is High, the promoters sell their stake. Promoters are even known to hire the spammers for similar activity.


Disclosures: I am not against any particular fellow or group but its the black truth that prevails in our share market. Most benefit for the spammers is due to the practice if investment prevailing in Share Market. The investors even in this age of internet buys share without researching.
A sincere request: Always research the stock and look into its future before buying any share. If you are not smart enough, do consult your investment advisor.

Wanted to write this blog from a long time but was really kept busy with work of investments.

How Spammers work in Stock Market?

Hello Investors,

        As and when there is up-gradation of technology, the chances of misusing the technology is always increasing and even with higher pace. In such conditions, we always need to be aware of what we are doing and whether we are falling as a prey to some of the spammers/cheaters. In earlier days, people used to give TIPs and I suppose that was a type of spam. Nowadays with so much increase of internet and getting access to information anywhere in the world, people can be misguided pretty easily. Also right now, a person who is active on FaceBook, Whatsapp or any other social media platform, we can consider him connected to at least 1000 people at  a time. Imagine the number of TIP that can be sent at a time. 

       Now the main point is that we do not fall in the trap of new type of spammers which can be really dangerous for all of the investors. It has been found that there are many pages on Facebook and other social networking sites wherein they lure users/investors to drop their mobile numbers for getting great trading ideas or tips daily.

        Any normal investors like me would check the profile and based on the comments and links will follow that page and drop the numbers on which Whatsapp is used. Mind you, many of the profiles from which the comments and likes are given are also fake. The operators are ready to give money for the same spam activity to the profile users.

        Most of the calls given by spammers have the volumes which are usually lesser than bluechips, a perfect characteristic for the stocks to be a multibagger. They give calls in morning most of which are only used for their own profits. Many of the operators are heard to be following similar tricks.

e.g.

If I am a spammer. I will buy a particular stock over period of a week and take handful of stock 'A' at average rate Rs 100.00

Now I am having handful of followers and the Page likes. Total combining to around 10000 followers. Believe me, its really possible to have so much followers. Tricks being making multiple pages and accounts. Also (Moneycontrol Message Board) MMB is misused like this. They will reach maximum person by sending the trading calls via

a) Whatsapp/ Whatsapp Groups.
b) Facebook Pages/Groups.
c) Moneycontrol Message Board (MMB)
d) Personal messages on the mobile number.

There will be 3 responses from the person who receives messages.

a) Will straightaway ignore the message and be safe
   
    Impact: Investors who chose option are mature and safe.


b) Will buy a little quantity for testing (With or without researching).

    Impact: Any normal investor with/without researching the stock will buy a little quantity. The spammers will HOLD on to the stock and the volumes will rise. So, now the investors feel like the call was right and they will soon see that they are earning basic profit. Now they will add more as per their capacity (This momentum will most probably be seen approx 10-15 days after the call was given by them).

c) Will wait for some days/trading sessions to check the behavior of the stock.
   
    Impact: After a week or so, the investors who were waiting for the stock behavior will feel that the call given by the spammers are right and they will most probably enter into the stock after approx 10-15 days. The timeframe similar to the ones in which the investors of 'option b' added the quantity. 
    Now due to all these volumes the stock will run up quite significantly above the average and its overall fundamentals. The spammers will start exiting after 15-20 trading sessions and you wont believe that the stock has already gained anywhere between 30-60% in 15-20 days. That profit is more than enough for any spammers who had done nothing but misguided the retail investors. 
    Now as the stock is already very much attractive in past few weeks, the buyers are always available as the stock comes into limelight which prevent the LC that can easily come when the spammers sell.

Continue to part II : http://shahstocks.blogspot.com/2015/01/beware-of-spammers2.html