We are surrounded by investing rumours every day that we are searching for things related to the stock or financial markets.
This happens in financial webs, blogs, brokers, and any web related to the sector.
Therefore, what should we do with those rumours and tips?
The best thing is not paying attention to them.
Follow your own opinion because a good deal of tips usually comes too late.
That is to say, when us, the small traders “notice them”, it has been long time since other people knew about them.
What is more, it is possible that those interested in selling at a good price start “spreading” the investing tips.
The tips and the scams related to them can come in many different forms.
It is possible that some tip that we hear of is true.
It is right, but the truth is that the majority of those tips will be either too late or useless in any case.
For instance, in the case of stock market courses, trading signals and similar services, there are some honest people, with cheap prices and good service.
However, as well as with tips, there are many more that are not honest or simply very expensive.
In this sense it would be better for us to run away from them, since the likelihood of falling in a trap is quite high.
It is the same when we talk about stock market tips.
Something that would be very logical, therefore, would be to bet against those rumours.
If we believe, as I say, that the rumours are in their majority not true or “too late”, it would make sense to bet against them.
Probably, although saying that is much easier than doing it.
Stock market rumours
We have to keep in mind that not all tips are the same.
There can be broker tips.
There can be a friend tip or recommendation.
There can be some web tip or recommendation.
We can have many different tips.
Although it is true that many of the broker tips are bad, it does not mean we have to bet against them blindly.
The best, in the majority of cases, is to follow our own criteria and try to do so far away from news or tips in the markets.
In this respect I remember one part of Darvas famous book “How I made 2 millions in the stock market”, in which the author said to us that it was during some months when he was close to the news when his system performed the worst.
In this case, being surrounded all day by people, recommendations, tips, news, rumours, friends, etcetera, made the situation much worse for Darvas and eventually ended up not following his own system.
Let us say he was caught in the short term hype.
His trading system only worked when he bought the stocks previously analyzed and he kept buying as long as they kept rising.
His system failed when he tried to buy the stocks in the middle of the frenzy present in the broker office or in the stock market itself.
Once Darvas abandoned his broker trading room and continued his system in solitude everything went back to normal.
Therefore, as a conclusion we should forget about trying to be successful by following tips in the financial markets.
Most rumours come because there are some interests behind them.