Bull Board Bullshit!

Date Added: June 1, 2018 | Comments Off on Bull Board Bullshit! | Filed under: Blog

As many of you are aware, on the internet there are chat rooms or so called “bull boards” on which the pluses and minuses of stocks are discussed by posters. The quality of the posts is widely variable from chat room to chat room and also for each specific stock discussed.

From time to time I will take a look at the posts for any stock in which we are involved just in case there happens to be someone knowledgeable offering a real opinion, or whom has dug up some interesting information. For example, a poster on Stockhouse wrote about a new patent application for the drug delivery system of a company in which we are involved prior to the company releasing that information. However, be forewarned. If you are ever tempted to go to one of these sites you will have to sort through a lot of garbage in order to find any information of value. The cannabis company bull boards are a great example of human stupidity in action. That I guess is the problem with a free forum on the internet.

A long-time client of ours who is financially sophisticated and who likes to do a lot of his own work on the names in which we invest (and presumably his own ideas as well) spends time posting on Stockhouse. I think he sees it as his mission to try to correct some of the crazy inaccuracies and misinformation that can sometimes be posted. Recently he contacted us for some clarification on facts concerning one of our holdings – Sherritt International -and in the course of that conversation expressed some frustration about his inability to educate certain posters who expressed wild and unfounded ideas despite his contributing factual data.

After our call I took a moment to look at the Sherritt International Stockhouse bull board myself and sure enough, as he had said, it is full of ridiculous assertions from a whole host of characters – some claiming to have insider knowledge, others simply posting profanity laced inaccuracies. Mostly just frustrated investors I guess, $200/day daytraders and perhaps even a few disgruntled former employees. Really nothing of value at all on that particular bull board except what our client had posted.

However, as I told him, he should not be frustrated by these crazy characters spreading misinformation and taking an end of the world perspective. For that is the exact reason why contrarian thinking, value based investing works. Rumour, suspicion, innuendo, frustration, and stupidity articulated (even if spelled incorrectly) by the “mob” of retail investors is your friend. Embrace their contribution to pricing inefficiency just as you embrace the contribution of institutional investor’s “institutional imperative”* to stock market mispricing. They are actually doing us a great favour.

All good things,

Scott

*institutional imperative – the forces at work on institutions that cause them to do stupid things See More Here


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