2 ms·
Most of the time people post ideas after they've invested in them. So if the idea is for stock X and you believe it is worth $20 but it only trades at $10, havi
by jakarta 16y ago
Most of the time people post ideas after they've invested in them. So if the idea is for stock X and you believe it is worth $20 but it only trades at $10, having your argument get sent out to market participants who might have more capital than you is beneficial. You might make them aware of something they missed and bring attention to the company -- which could push the stock price up as more people catch on. That's beneficial to you.
Since sites like SumZero and VIC have a ton of buyside members, which is a rather small community of people who spend a ton of time talking to each other, it's pretty unlikely someone is going to get away with stealing your idea and claiming it as their own. They will probably get called out on it.
The other benefit to posting ideas is you can get criticism and see if your logic is flawed or maybe that you missed something in your analysis.
I will always remember an idea posted on VIC by a guy who ran about $400M in assets at the time. This was in 2007 and it was for a financial company. A few commenters asked questions relating to the company's ability to accurately estimate customer default rates. Rather than defend his thesis, he simply said they should move on because apparently they aren't interested in the company. What happened? Management at the company did incorrectly estimate loss rates and as a result the company crashed. It dropped ~80% and this was close to 10% of that fund manager's portfolio.