Wall Street: Always Be Skeptical Of What You Read

 With the stock market exploding in popularity, you can now get an almost unlimited amount of stock opinions and recommendations from television, radio, magazines, newspapers, and the Internet. No matter what stock you may be interested in researching, you should be able to find lots of differing opinions.

But always remember, free opinions are usually worth what you pay for them. Nothing!

Take a look at the screen grab I took below of two stories, back to back on the same day about the possible future valuation of GoPro. Apparently one analyst thinks GoPro stock can go down to $15 (from about $20) and another things the stock might go all the way up to $90! Could there be two opinions that are more different than these two? Hardly.

These two headlines demonstrate the wide variety of advice you can get almost daily from the Internet and other sources when you set out to research a stock. It is up to you, the investor, to carefully navigate the waters and decide who and what you believe and why.

Unfortunately, it is often very difficult to figure out which scenario is correct and if any are correct at all. This is because analysts and other "professionals" sound so convincing. It is their job to sound like they absolutely know which direction a stock is going to go and the reasons they give usually sound plausible.

But honestly, many stock market pundits are not much more than glorified salesman trying to drum up sales. That is why you should always be skeptical of everything you read and hear whether it be on TV or the Internet. Don't get too enamored with any one analyst or TV personality because in the end, it is your money you are buying stocks with and not theirs. They are in the business of creating hype and sales in an industry that is always looking for new blood.

Anyone Will Soon Be Able To Invest In Startups And That Is BAD News!

One thing everyday investors can't do right now is get in on the ground floor of new startups. They also can't get the IPO prices that all the bigwigs get before the companies stock actually opens on that first day of trading on an exchange. Most investors are relegated to buying stocks only when they open up for general trading, often when the first price available is much higher than the insiders got.

But with a new recent ruling from the SEC, opportunities to invest in some startups may soon be available to everyone early on in a companies history. It will sort of be a Kickstarter for startups and honestly, that might be a bad thing for investors who don't understand the risks.

Kickstarter started out as a site where you could go to fund cool new products that needed money to get off the ground. Usually helping them fund their product meant that you were promised the item when and if it was ever finished. But over time the site has had to deal with a lot of fraud, projects that never got off the ground, products that were inferior to what was promised, and a whole lot of other things.

The bottom line is that if you decide to back a Kickstarter project, you should fully be prepared to get nothing back for your money. And that will be the inherent risk anyone takes when investing in a startup as allowed by this new SEC ruling.

Think about this: most people have a hard enough time learning how to manage their portfolios and beat the markets that are full of established companies with long track records and extensive product portfolios. How on earth will investors be able to correctly evaluate new startups where information is limited and there is no history to base any decision on?

Crowdfunding has taken off in recent years and it looks like it is spreading to the investment world. For many, it will mean taking shots and hoping for a miracle. It will also mean that you will open yourself up to potential fraud and other shenanigans. It just seems to me like another way to play the lottery and that many investors will think of it that way. I think this one will fall under the category of "investing for dummies"