TL;DR
A Reddit user flaunts supposed $400k daily gains from mining stocks, triggering suspicion of a pump-and-dump scheme. This echoes past market manias like the dot-com bubble and Enron, highlighting the ever-present risk of manipulation.
Story
A Reddit user boasted of $400,000 daily profits from mining stocks, showcasing a screenshot as “proof.” This smells of a classic pump-and-dump scheme.
‣ Pump and Dump: Artificially inflating an asset’s price (the “pump”) through misleading hype, then selling at the peak (the “dump”), leaving others holding worthless bags.
The user’s emphasis on specific tickers (MP, LAC, UUUU, ABAT) without concrete analysis screams manipulation. They’re creating FOMO (fear of missing out), hoping others pile in, driving the price up further. This echoes the dot-com bubble, where flimsy promises led to inflated valuations and eventual market crashes. Remember Pets.com?
‣ Dot-com bubble: Late 1990s market frenzy centered around internet companies. Many lacked solid business models, leading to a spectacular crash.
While some commenters celebrated, others questioned the story’s authenticity. This skepticism is crucial. Extraordinary claims demand extraordinary evidence, which is absent here. The user’s stated intention to “roll” positions (likely options trading) adds another layer of complexity and risk. Options are not for beginners.
‣ Options: Contracts giving the buyer the right, but not obligation, to buy or sell an asset at a specific price within a specific timeframe. Highly leveraged and risky.
Like the infamous Enron scandal, this situation highlights the danger of blind faith. Enron’s deceptive accounting practices fooled many until the house of cards collapsed.
‣ Enron Scandal: Massive accounting fraud uncovered in 2001, leading to the energy giant’s bankruptcy and widespread investor losses.
Advice
Don’t fall for hype. Research before investing. If it sounds too good to be true, it probably is.
Source
https://www.reddit.com/r/wallstreetbets/comments/1jz8w2l/the_mines_were_calling_400k_profit_day/