TL;DR
WallStreetBets’ ‘due diligence’ posts are a sophisticated pump-and-dump scheme. Amateur investors chasing quick riches lose their savings, while the early birds fly away with the profits, exposing the harsh reality of online investment platforms.
Story
Another day, another get-rich-quick scheme bites the dust. This time, it’s the ‘due diligence’ posts on WallStreetBets, a digital Wild West where amateur investors think they’ve found the next big thing, only to end up holding the bag.
The mechanics are simple, yet effective in their deception: Someone posts a supposedly thorough analysis of a stock (the ‘due diligence’), often riddled with technical jargon and biased optimism. This ‘DD’ inflates the stock price. Unsuspecting investors pile in, hoping for a quick return, driving up the price further. Then, the original poster and early investors sell, leaving the latecomers holding a worthless asset. It’s a classic pump-and-dump scheme, dressed up as legitimate investment advice. Think of it as the Enron scandal, but with emojis and internet slang.
The human impact? Countless small investors, chasing dreams of easy riches, lose their savings—their retirement funds, their college tuition money, even their grocery budget. The data shows that 1-30 day returns from following this ‘advice’ are no better than random chance. The market is no fool. It’s rigged by narratives, and few see through them.
The lessons? Always be skeptical. This isn’t just about stocks; it’s about any investment promising overnight riches. Remember the 2008 housing crisis—similar narratives led to immense losses. If something sounds too good to be true, it probably is. Due diligence is great, but it must come from trusted sources, not a bunch of internet randos who want to offload their soon-to-be-worthless stock on you. Never invest what you’re not prepared to lose entirely. Always confirm the info elsewhere.
The conclusion? In the chaotic, anonymous world of online investing, the odds are stacked against the average investor. And, let’s be honest, this is how it almost always ends. This sub is not a free ticket to wealth; it’s a trapdoor to poverty for the naive and gullible.
Advice
Trust no get-rich-quick scheme. Always perform your own due diligence from reliable sources. Never invest more than you can afford to lose.