Well SEBI has come up with a proposal of banning all stock recommendations through social media, Blog(Just like mine though it’s free),WhatsApp,SMS,facebook or any other online platform.Though it might look like dada Giri of SEBI as several of us reacted on Twitter with #tags of #SEBIkidadagiri , #SEBIgoback.But we have to make judgments by considering all the good as well as bad aspects.What are the good aspects? Let’s see:
How many of us receive SMS like this:
Now when you are new in the market, you react to these messages.What the person behind this message want?They are mostly big operators.They take the stock prices up by buying huge chunks of these stocks.When it is time for them to offload their stocks, they start sending this kind of messages.The general public thinks that the stock price is soaring daily by seeing the previous chats and they buy the stock.Soon when the operator offloads their positions, the stock prices begins to fall with series of lower circuits.
Let me tell you a story of mine, rather a tragedy.When I was new in the stock market, I was tricked by the same way.A message came on my mobile about JRI Industries trading at Rs.27 with a target of Rs.35 with one-day holding.The message was from capitalvia(actually not-Just written).What I did is I brought 200shares of JRI Industries.I was very happy as I thought of making Rs.1600 profit the next day.
Next day I saw the price was Rs.25.It was the Stop Loss given by the way.I tried to sell it.But oh my goodness,I was not able to sell it.Why?I tried again but my order remains pending and was not getting executed.As I was new at that time,I did not have any Idea of what was happening.
Actually the day I bought the stock, it was at the lower circuit.I bought the stock at the lower circuit.The next day there was no buyer for the stock.The operator has failed to offload all his stocks at a higher level and was trying to offload it by these type of fraudulent messages.Believe it or not, I was unable to sell the stock.It went down with series of lower circuits with no buyer.Currently, the stock is trading at Rs.2.90.
So if SEBI is trying to implement the strict rule, there might be some reason behind it.Not just this, there are a lot of fake advisors in the market.In fact, everyone seems to be doing advisory business.When I was new I was myself fooled by a fake advisor who took Rs.5000 and made me fool.You will find a lot of retail traders losing lakhs of money by taking advice from fake advisors.
In fact if you are in stock market for a while,then you will get calls daily from these fake advisors.Somehow they will manage to get your number.
Now the bad part.The SEBI registered ones get to advice!!But what about the quality.Do you know how much money people lost by trading on the advice of Capitalvia?Of course, it is a SEBI registered one.Let me show you some screenshots:
You will find innumerable complaints against Capitalvia if you google with the search term ‘Capitalvia complaints’.The list is endless.And SEBI seems to take no action against Capitalvia.Most probably registered bad quality ones are allowed in the market.It is not like Capitalvia which is only running this scheme, there are many.There are many bad quality registered ones in the market.You need to be very cautious from them.Anytime they can convince you by saying out their SEBI Registration number.
We can only hope that we do not end up with only the registered ones making money for themselves,not for their clients!!