One employment for the little investor is that big investors tin manipulate markets too screw you.
Influenza A virus subtype H5N1 reader writes inwards reply to a previous posting that many believe the collapse of the just whatsoever one-time stock that pays a dividend is a practiced investment - you lot even therefore direct keep to crank the numbers. And in that place other things to invest inwards also stocks - bonds , authorities bonds , existent estate , whatever. The sentiment that you lot tin "time the market" or instruct a "hot tip" too instruct inwards big is an illusion - unremarkably an illusion fueled past times people who desire to accept your coin away from you.
The guy promoting the stock on the tv or inwards the fiscal pages already bought his shares. Once you lot purchase , too drive the cost upwards , he sells. And plainly , this is perfectly legal , provided he doesn't lie near the company. He's only sharing what he thinks is a practiced investment , right? Caveat Emptor.
But this number of cornering the market also illustrates why you lot don't desire to hold upwards a minority investor inwards a thinly traded stock. Say , for event , you lot purchase stock inwards a companionship where 51% of the stock is owned past times menage unit of measurement members of the founder , or investment bankers , field alone a little minority is owned past times chumps similar you. They tin command the companionship too brand decisions - too manipulate the cost of the stock every bit well.
Small family-owned companies are the worst , every bit they volition pad the payroll amongst their relatives too accept coin out of the companionship too piece of work out you lot amongst nothing. Oh , yea , they direct keep a fiduciary duty too all , but all that leaves you lot amongst is the right to sue.
IPO stocks are non much better. Many of these famous dot-com IPOs of recent years sold off alone 5-10% of the company. Some fifty-fifty were therefore ballsy every bit to limit voting rights of IPO shareholders. You are feasting on the crumbs at the tabular array hither , field the founders gorge themselves on roast beef.
"But Bob!" people say , "All those other people are getting rich! I desire to instruct rich too!" But you lot won't instruct rich playing their game. They brand coin selling this crap to chumpsters similar you lot too me. And they hype , inwards the fiscal pages , only plenty stories near Johnny Lunchbucket striking it rich to instruct you lot to intend , "Gee , that could hold upwards me!"
Casinos purpose the same strategy. So produce personal injury police describe firms. So produce a lot of rip-offs inwards the world. Ever seen a billboard for a payday loan house , amongst the lady amongst the fan of $20 bills? This , too , could hold upwards you! No i talks near or advertises the downwards side.
Gambling is non Investing. If you lot desire to "Strike it rich!" too therefore practiced luck. But this spider web log is non for you. Because that sort of mentality is the exact contrary of what I believe in.
And no , I'm non near to alter my mind.
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