A Stock Tip On Stock Tips
May 22, 2009 by Tisa Silver
Filed under Finance
Has anyone ever approached you with the “next big thing” in the stock market?
They may say things like, “You’ve got to get in on this right now,” ”This stock is going to take off,” or ”No one else knows about this yet.”
If it hasn’t happened to you, movies and television shows make plenty of references to tips like this. For example, the movies “Wall Street” and “Boiler Room,” as well as TV shows including Seinfeld and The Young and the Restless have all incorporated financial shenanigans into their plots at some point.
In the Seinfeld episode “The Stock Tip,” George convinces Jerry to invest in a company called Sendrax. According to George’s sources, the company was coming out with “some type of electronic thingy” that would televise opera.
Jerry was initially skeptical, but agrees to invest $2,500. Soon after, the stock declines, so Jerry gets scared and sells the stock. George holds out and is able to sell later at a profit. The scene below shows George flaunting his wealth and offering another stock tip:
Stock Tip: It takes more than one “thingy” to make a good investment. Do not invest in a stock just because the company is creating a new “thingy.” There are a lot of companies working on the next new “thingy,” but there is no guarantee that the “thingy” will be profitable.
George got lucky after holding out, but as we saw with Jerry, when you really don’t know what you are investing in, it can be hard to stay the course.
Ha! As an avid Seinfeld fan, I can appreciate this comparison. Very valid point made here. In turbulent times like these, being a thoughtful investor is more important than ever. Doing research instead of just listening to “tips” from well-meaning folks is not such a wise strategy. Thanks for the lesson and the humor.
You are absolutely right in this regard. In my country, I see a lot of people just invest in a new product without knowing anything about that company or product. They just believe in rumors and get into daydreaming to become rich in a short time. I see many people who lost their fortune in this way. I think that before investing, one should have a very good knowledge not only about the company, but also about the whole system of the share market. People should not come to share market only because they failed to shine in other fields, which I see very often in my country.
Thanks for picking up an important issue.
Biplob,
Thank you for reading and sharing your opinion. I, too, have seen a lot of people get caught up in rumors and put their money into stocks they know little to nothing about. Unfortunately, a lot of people have tried to get rich quick with stocks. It is possible to get rich in the market, but most of the time, it is not easy, nor fast.
Thanks again for commenting,
Tisa
Investingpro1,
Another Seinfeld fan! Thanks for taking the time to read and share your opinion. All jokes aside, you make a great point: investors should be thoughtful.
Thanks,
Tisa