As an investor, you will often come across stock pitches that I like to call "Hype Stocks." You will usually come across these "ideas" by a friend, group chat, articles, or even the news. They may have possible merger news, a new product, hopes of passing a phase, or it's a hot brand-new innovation with a promising future. You know what I am talking about, those stocks that end up with daily runs of 25% to 100%. Breaching and screaming in your face as a top gainer in scanners. The first thing I need to tell you is that you are not alone. You did not magically come across, and you are probably not getting it at a reasonable price. 90% percent of the time, these stocks end up being pump and dumps. By the time you hear about it, the smart money has already been holding, and they are getting ready to unload it all for gains to the new dumb money. In short, this type of speculative trading can be resembled to "The Greater Fool Theory." You buy a stock at a given price because you believe someone else will buy them from you for higher. The problem here is that eventually, you run out of buyers, (fools) and from that standpoint. There is only one way the stocks price can go, and that's down. 80% of the traders in these scenarios end up taking a loss. Your chances of profiting are very low. Plus, there are plenty of common mistakes made like buying too high, holding for too long, or jumping in when the hype is over, and the stock stays flat. To avoid any of these scenarios, I often recommend staying away from groups who chase or concentrate on speculative trading as well as avoiding social media apps like Twitter, StockTwits, Tradingview, or News and Articles. Worst of all, Reddit and the infamous WallStreetBets. I promise you; you'll be better of not clinging around any of them. Not only will you evade going into trades you don't understand, which then causes you to question when to buy and sell. But, you won't ever build the terrible habit and wrong mentality when it comes to investing your money. An intelligent investor is always aware of where his investment will head in the future. He is investing, not speculating or gambling. Although, you may get lucky in a speculative trade and see some nice returns. You are building a terrible habit that will only cancel you out within your portfolio after enough time. That's usually when you end up in that situation where it has been months or years, and your account hasn't really gone anywhere. Or, worse, you are down over -50%. A final fact is that it has been proven time-after-time that investors always turn out on top over traders, speculators, and gamblers. When was the last time you heard of a legendary billionaire investor who talks about chasing stocks, speculating, or making those types of trades? That's right; you most likely haven't. Well, this brings me to the following video I would like to share with you. Featuring Billionaires and legendary investors John Templeton and Warren buffet Please pay close attention to the keywords they use and the gems they drop about investing. Particularly over how they stay away from Wall Street to avoid hype stocks, speculation, and none-sense. Invest in facts, not stimulation. John Templeton - $13+ Billion Dollars Net Worth Warren Buffett - $79.1+ Billion Dollars Net Worth
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