The internet is set up in such a way that it’s very easy for people to gather around a common interest that they all share and form communities. The form that these communities take is typically that of a message board, or bulletin board. These are websites where users can sign up and engage in discussions on a variety of topics pertaining to their interest. So, for example, on an investing bulletin board, most of the discussions would revolve around investing.
Bulletin Boards And Scams
The internet puts us in contact with a lot more people in a given day than we would have in the course of a regular day offline. Because of this, the ratio of questionable encounters to good encounters increases quite sharply. Nowhere is this more abundantly clear than on online bulletin boards. While there might be a handful of contributors on most bulletin boards who know what they’re talking about and are there to dispense genuine advice and conversation, many people view bulletin boards as just another place to find a mark.
It stands to reason that when investors get together and talk, there’s going to be some advice given, or “hot tips” passed around. Scam artists take advantage of this by appearing to be “just one of the guys” and offering what seems like a friendly stock tip. In reality, this is a pump and dump scheme, designed to make lots of people invest in a stock, spike its value, and let the scam artists walk away with bundles.
Use Your Common Sense
Of course, bulletin boards do contain valuable and legitimate information from time to time. Not every stock tip you see mentioned on a bulletin board is a scam in the making, but you have to use your common sense. Just as in real life, you’d be wary about taking a tip from a stranger, treat people on the internet the same way. As you spend time online, remember that all those usernames represent someone who exists in reality. Observe their reactions and get a real feel for their character before you decide to believe anything they say.
See you next week for part 4 of Investment Scams
Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 – 2008
{ 2 comments… read them below or add one }
Hi Sean,
Okay, you’ve just answered my question on the previous post. I thought you’d be more likely to see the pump and dump at investment seminars. But, it makes sense you’d see them online too.
One of the biggest problems online is that you can’t see who you’re talking to so you can’t pick up that vibe. I guess the moral of the story is; don’t take any stock tips from people you don’t know.
You have summed it up very well in your post, ‘use your common sense’ when it comes to taking up offers online.
I agree with Jazz, that people are ‘hidden’ online and we can’t always pick up vibes if we don’t see them, however, look at what is being offered and do your due diligence before saying yes.