Beware of "Pump & Dump" Scheme

This morning we received an industry communication letter from BURSA MALAYSIA about the manipulative activities known as "Pump & Dump" scheme. The same warning has also appeared in The Star (here).

This scheme is the updated version of stock tips that you used to get from your friends or colleagues or brother-in-law years ago. You are your only safeguard. If you find the "news" to be too good to be true, then chances are it is not true. However if you feel that the news is a good opportunity, you must do one of two things:

1) If it is a tip about a big project, verify the source of the tip.
2) If it is a case about a big jump in profit, verify the thesis of investment.

In nexttrade, I do not peddle tips; only logical investment thesis or market observations.

Finally, you must exercise caution not to invest all your money in one or two investment ideas. Always diversify your investment so that you can take a hit even after all your careful study or investigation.