Take care while investing in shares.

It is important to be aware and well informed so that you don’t get carried away by hot ‘tips’ and rumors spread by unscrupulous people out there to make a quick buck. Please read this and send it to everybody to spread awareness.
Here I would like to share with our growing community of investors, how ‘cheats’ operate. It is very important to know how the ‘cheats’ and ‘unethical’ people operate in order to prevent oneself from being cheated and losing hard earned money.The regular technique adopted to rig up stock prices and cheat small investors is as follows:

1. Select a stock with a very small market cap. Small is a relevant term depending on the capital available to the cartel of ‘tricksters’Usually it is a company with a market cap of less than $ 10 million/ Rs. 45 Crores

2. The cartel/group starts buying or already hold a large part of the company's shares. Usually such companies have very low share prices since they are making heavy losses.

3. The cartel now own a large part of the shares at very low prices, it can be sometimes as high as 98% of the total shares available in the market.

4. The cartel and group start spreading positive rumors about the stock, through the media and network of brokers and friends. Usually keeping very high target prices for the stock in question.

5. So the Rs 2 stock will have a target of Rs 2000 in the next 1 years.

6. Because of this hype everybody starts buying, and nobody is selling because only the ‘cartel’ owns the shares.

7. This causes the stock to keep hitting an upper circuit everyday. There are no sellers because the only people who hold a large part of the so called gem are the ‘cheats’ and ‘manipulators’

8. Whoever gets in the stock keeps making huge gains as the stock shoots up from Rs 20 to Rs 200 within days. They start praising the stock too, unaware of the hidden story behind it.

9. Now that the cheats have made huge profits, as their purchase price is very low. They start selling.

10. A few times it hits lower circuit, however several innocent investors with the dreams of making huge returns continue investing. The manipulators continue spreading rumors that it is just a short term correction, and suggest people to start ‘accumulating’ it

11. The manipulators have made their fortunes and decide to drop the stock, the stock crashes back from its high. Causing millions of innocent investors to incur loses.Feel free to share this information with each and every investor you know.

this article is taken from gsifs.