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.

No comments: