Stepping on Superman's cape - Beware the merchants of hype

Ahhh Sunday, a day I sometimes like to reflect on those things that daze and amaze, that astound and confound, the games that amuse and confuse retail players in our wonderful equity markets.  

Its back to school time so I thought I'd share a lesson taught by the late Jim Croce.  Thankfully I'm writing this and not singing it, if I subjected readers to my singing voice I'd probably lose all of my loyal readers.  Yes both of them :-)  Those who've been around this planet more than half a century, you might remember this song.

♪♪♪ You don't step on Superman's cape

You don't spit into the wind

You don't pull the mask off the old Lone Ranger

And you don't mess around with Jim ♪♪♪

Now, aside from pointing out my age, that song teaches a very valuable lesson.  I don't know who this Jim in the song is, but the first two characters, Superman and the Lone Ranger, they don't exist.  

However when it comes to the stock market and social media, they're everywhere.  Anonymous posters abound who have Super Human abilities to pick out winning stocks, and like the Lone Ranger they're altruistic and benevolent souls simply wanting to help investors make winning plays.

And when they're not posting to message boards they're working at homeless shelters, donating blood or visiting elderly people in nursing homes.  If you believe this then I have a really hot stock tip for you, a company that's is poised to explode, you can read about it here:  Sure fire winning play

I've written about this before, but not for a while.  The reason these merchants of hype work social media sites is because fools abound.  We all know about those emails that come from some widow in a far flung African nation.  She sends you an email seeking assistance in repatriating millions of dollars that she is willing to share with you, but she needs money to facilitate things.  We've all seen it and asked ourselves:  "Who's dumb enough to fall for something like this"?  Not many people, but there are some desperate and dumb souls who do fall for these scams.  

And in the markets there are desperate and dumb people in droves, who will throw hundreds, thousands...even tens of thousands at a stock no matter how much of a diluting pig it is, no matter how many years they've been losing money, no matter that the main players have never had success turning a start up type company into a profitable business.

Be careful out there.  There are lots of industries that are going to be big, new energy solutions, new technologies, new drugs, new consumer products like food and drink.  But I would be dollars to donuts, that the small and microcaps that will in fact become big and successful, they don't have social media pumpers seeking out anyone with a brokerage account and a pulse.  Most of them will fail miserably, taking your money with them while providing the execs with a nice paycheck for failing.

That's enough for now....good luck.