How stock scams works in India

POSTED BY manish ON June 7, 2011 COMMENTS (193)

I will teach you how stock scams work today and for that Let me declare something – “After years of study and hard work, I have come up with a strategy which can predict stock markets movement with almost 100% accuracy. Each month I can tell you which way market will move in next 30 days, it can be UP or DOWN and I can guarantee that. If someone needs to see the performance, I can give a free 6 tips trial.” Now what will be someone’s reaction on hearing this? Most probably, some of you will get excited and interested in getting these free tips, at least to check if I am saying truth or not! . Right now I have a big subscriber base with more than 10,000 people (11.5k to be precise) whom I can reach by email. Let’s see how I can create a stock tip scam –

Stock Scam

Here is how we will build a scenario wherein you are Ajay who is extremely interested in knowing about the tops which are almost 100% accurate. Ajay is bearing some disbelief in his mind, but due to the trust factor in the given tips he thinks ‘Let’s see what tips Manish gives, they are free anyway and by reading his tips I am not losing anything’.

I start sending you exactly one tip each month and it starts this way:

Tip #1 (May) : Markets are headed UP

Reaction  : Markets really went UP in the month of May. Ajay feels good, but still he is confused if its just luck or did It really went up based on my tip . Ajay anyways wanted to just check the tip and how it turns out . He is a bit impressed and he has made up his mind to act upon the tips if 3 consecutive tips work.

Tip #2 (June) : Markets are headed UP

Reaction  : Markets after a bit of volatility finally went up and the tip was a success again! Markets are up by great extent, but Ajay feels like a fool to be so fearful and not act on it. But his confidence has started building up. If the next tip also works, Ajay will invest some money for sure based on the tip!

Tip #3 (July) : Markets are headed DOWN

Reaction : Crash! A huge sell off came in the month of July and the 3rd tip in a row was correct. Ajay starts feeling “Oh my god! Looks like Manish really have come up with something amazing which can predict markets” Ajay makes up his mind to “try” next 3 tips and see how it performs!

Tip #4 (Aug) : Markets are headed UP

Reaction : With all the excitement, Ajay has invested Rs 10,000 in the markets to see if he can make some quick bucks! However, Markets are headed down in the starting of the month and all the TV channels are confirming that next Crash is on the way. Ajay is a bit nervous and secretly praying for the tip to work somehow. He wants market to go UP as per the tip. Everybody around him has already sold off and decided to sell of all the stocks, but you are on the other side. You are praying, literally! And here it comes, markets make a turn up side and it makes one of the sharpest come back in 1 week. Ajay is now in profit and he feels like a winner. Ajay’s confidence in my tips is becoming stronger, but still he is not ready to take BIG risks, he needs to solid confirmation that the tips will fall true no matter what, which is about to come .He will invest 40k in the next tip of mine.

Tip #5 (Sept) : Markets are headed DOWN

Reaction :  Ajay thinks that he should liquidate all the investments in direct stocks and even his mutual funds. His friends do not think alike and suggest him that he should not go with the tip, but Ajay wants to confirm the tips and wants to see the affect on his investments in real time 🙂 Markets move downside and he is now confirmed that there is really some kind of mega-research done by Manish to come up with the tips using his secret-strategy. Ajay can now visualize how he can become a millionaire soon by subscribing to the tips for next 1-2 yrs. He is just can’t wait for the last tip to show its magic!

Tip #6 (Oct) : Markets are headed DOWN

Reaction : Ajay is totally with the tips now and has decided to use this last one to make some quick bucks, he does some short selling and buys some puts options by finding out how to make money in falling markets. With his confidence in the free tips, he does not lose focus and waits for the tips to turn correct. Markets fall as per the tip and due to his decisions, Ajay has made some amazing money this time. He is clear that he wants these tips at any cost now!

Free tips are over now.

Free tips are over now .

Taking money from the targets – How Stock Scams unfold

Tips are over now, Ajay and many others like Ajay has experienced the amazing tips which really worked. They all get a mail after few days from me.

Hi, you might have already got 6 free tips from me each month, we give only one tip each month, but it’s bound to work. It’s based on our strategy which is based on years of research. If you want to continue getting the tips further. It would cost Rs 50,000 for 1 year subscription. You can expect the same accuracy like you saw in last 6 months.

Disclaimer: The tips are highly accurate and we make sure they are accurate, but we can’t promise it and can’t guarantee it legally. Risk is yours

Ajay is so much impressed with my tips performance and so much drowned in greed, that he subscribes to my offer and pays 2 lacs for the secret tips subscription. The tips start coming from next month. But there is some issue this time! . Somehow, not all the tips are working this time. Some tips work, some does not. It’s not at all accurate like it was before. In reality all the tips are just random tips and Ajay is totally frustrated. He has lost a lot of money because he invested big money each time, thinking it would work!

The truth is Ajay fall prey to a stock scam. Now let me share how all this works.

How this scam works

At this moment I have around 10k or more email subscribers and I can send emails to this 10,000 group. I divide this group of 10,000 readers into 2 parts A and B, I send a tip “BUY” to A group and tip “SELL” to B group. One of them will be true for sure. After month is over, I see which tip was correct. If A group was correct, I discard group B and only have people in group A as my final group. This group will be the group which got “correct” tip.

Now I do the same thing again, I divide them in group A and B with 2,500 members each and send “BUY” and “SELL” tip to them. Now again, markets will move UP or DOWN and one of those groups will be right at the end of the month. I again discard the group which got wrong tip. This way I continue doing it for 6 times and at the end I have small group of 156 people who was right all the 6 times and Ajay accidently belonged to his group.

How Tip Scam works

Targets paying for the subscription

Now you can imagine how many people will fall prey to these scams? Even if 20% of the people fall in the trap and are ready to pay Rs 50,00o, it would be Rs 10 lacs in total! Here you can clearly see that out of 10,000 there will always be a group of 156 people who will always get “accurate” tips and the beauty of this strategy is that people who were discarded only get one wrong tip, and after that wrong tip, they don’t get any more tips.

There are many tip providers in real life who claim to give you 90-95% accurate tips with free 1 week trial, If you are getting a lot of right tips, you might be that lucky small group which is their “TARGET” as seen above in the chart. Don’t fall prey to these stock scams. Beware!

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193 replies on this article “How stock scams works in India”

  1. reddy says:

    No need of such long 1 week trial to impress the traders. Just 1 day trial is enough to attract people to this dirty game. They give a call…..if it works, they will be behind you until you subscribe. I had a bitter experience with such tips provider based in gujarat. He gave me a call in options which has hit the target. Then he told me pay Rs.30,000 into so and so account, you will be a life time member of this scheme. When a call went into a loss, he simply said we have also lost money in the call. I asked him that then why are you charging money for such poor ability. He said read our disclaimer. Just by adding a disclaimer they are escaping. Now, whenever I get a call from tips providers, I say them I donot trade but I invest in equities for long term ie 3 years period. You give 1 trial call so that I will assess your performance after waiting for 3 years. They started disconnecting the phones.

    1. Thanks for sharing that reddy

  2. Shankar says:

    Good article. I was getting emails from equity master than I was searching for reviews and landed here. Thanks for sharing this and saving me 🙂

    1. Hi Shankar

      Thanks for sharing your health insurance requirement. I think the best think you can do is leave your details at https://www.coverfox.com/jagoinvestor . And you will get a expert assistance on selecting and buying the right policy for you.

      You can then take the decision.

      Manish

    2. Glad to know that Shankar ..

  3. AliakbarRiyaz says:

    Dear Manish,

    This is realy a very helpful information. I am daily getting SMSs from different research companies to subscribe nd they are giving free trials too. However after reading this article. I am not subscribing to anyone. I watch CNBC AAWAZ DAILY in the morning since 7.00 am till market opening. It is very helpful to pick stocks for long term. No one can become millionaire overnight.

    Also if you can tell me whether big names like SP TULSIAN, SUKHANI are reliable for these tips.

    1. I wont recommend them . I dont have doubt on their skills or knowledge. But markets will not help you if you have tips and knowledge. You need to have patience to not do much for long.

  4. Gagan says:

    Equitymaster.com is asking me subscription for Rs. 2 lakhs for “Equity Master Reserve” scheme. They think that I am a fool who will pay. I earn 12% through SIP in last few years.

    1. Thanks for sharing . ITs upto you to evaluate if its right choice for you or not !

  5. Mil says:

    I am getting exactly similar emails from a company called equitymaster. What are your views on this company?

    1. I am not saying that every company is fraud , you judge yourself if you want to move ahead .

      Manish

    2. satyajit says:

      Equitymaster is genuine.But they are just too conservative.

  6. pankaj says:

    Very informative blogs. Thanks a lot.

  7. Ravi says:

    Manish,

    You are awesome. GOod analysis

  8. Prabhat Dhayal says:

    Dear Manish,
    But i have subscribed to intraday tips in cash market of Equitypandit, a month back. how come their accuracy is good for last whole month, if you say that the consistency is not possible in the accuracy. They don’t even provide free trial. There might be few companies, which are really doing good things in technical analysis. What is your suggestion, is there some strategy in it? please throw some light on it.

    1. Yes, there will be some very good companies, if its working for you, then continue

  9. sachin says:

    Don’t ever pay for this accurate share tips site.
    Just imagine if they had already knew the market, the would have kept as secret & earned more money without informing you.
    Just take an example if I know today share is going up by Rs.8/- & news is confirmed. Then I would buy 1000 shares which result me Rs.8000/- profit after market end.
    If I pass this information to you or say 100 people everyone will buy these shares & then margin will be low due to restriction & limit offer by broker trading site.
    But if I pass this information by charging Rs.8000/- p.m. , I get profit in 1 day by one person & just analyze if 100 will turn in month , it will 100*8000=Rs.8,00,000/-p.m. & this rally will continue by every month.
    So be careful & watch market & study daily trend to become successful trader. Always do one intraday & one delivery call. Monthly sip in Mutual fund is best option.
    If you can become wealthy with these share trading tips sites, nobody will work on this planet earth, everyone will be doing share trading, they don’t need to go to job or to engage in any business.
    So be prepare for good market returns on u r own study.

    1. Thanks for sharing your views on this topic Sachin !

    2. afa says:

      Awesome, thank you for the comment

  10. Sandeep says:

    But what about the market study?
    the question is why do we( in India) not entered in share market after good study ?
    why we are depends on all these scams ?

    problem is everybody in market wants to earn quick bucks but for this no one wants to study the market, only few peoples are go through proper way. they use types of charts, they use types of indicators, all type of study material what they have. and i think they were succeeded or succeeding.

    i read somewhere else, in usa peoples who are in share market among them 85% are invested in share market after fundamental, technical analysis but here in India the ratio is only 15% among the peoples who are in share market.

    so why don’t we take the help of all the market instruments, all charts, all parameters we have? we are not doing this type of study this is why , these type of scam creators building their network and fools us.

    so please understand market before investing and follow market rules very strictly then market will gives you very good returns. and i am not just saying it, its my personal experience.

    Manish
    i just read your article on credit cards, it is very helpful for peoples like me who don’t inquire very deeply. and your other articles are also very useful.

    but seems like you are not so positive on share market because you think its highly risky, i know it is very risky but i think when we go in proper way we can at least control the risk .

    please do not take it personally.

    1. I am fan of stock markets 🙂 . I agree with your thoughts . Not even 1% are into markets with fundamantals or technicals , 99% invest without any rational !

      1. Punit Gupta says:

        I dont want to put a number on it but yes agree majority of people come to stock market to become rich overnight. And they go to mutual funds to have their savings secured. Both extremes are little comical to me.

        If one takes time in diligently studying companies and invests for long term, they are set to beat the sensex or mutual funds.

        Similarly people trying to do short term trading specially intraday stuff, find it extremely hard to maintain their calm and not fall prey to such services. I have experienced it myself when I started but slowly I learned to stay away from such people who are trading irrationally.

        1. But Punit

          Are you saying that all the investors who ever it is is equally blessed with those skills or required understanding to beat mutual funds and sensex consistently. I mean you have put it so easily that I can go to any investor and say that – “Hey , put some efforts , or follow this process and you are 99% guaranteed to beat mutual funds or sensex your self” ?

          Can you comment on that ?

          Manish

          1. Punit Gupta says:

            Good point. Not everyone has the skill / time to actually be able to do it themselves. There are some people who are good at it while others struggle. I gave the example of index because most funds benchmark their performance on that. Beating index while its difficult, not impossible if you put in required amount of discipline and research behind it.

            However I would admit, its probably easier said than done. I myself struggled for a while before finding out what works for me. And if you ask me, obviously I don’t know what that magic pill is which can help people get there. And thats the reason why mutual funds need to exist. People who like to have control and like to do research themselves, picking stocks directly is an option for them. Maybe with proper education and training that number could be increased significantly.

            1. Thanks for explaining that Punit 🙂

  11. Rajandran R says:

    Apart from Stock Tips scam here is how trading Signal Scam will work worldwide and many such stores are already running in india too.

    1)Download free Programming strategies with Buy/Sell logic available in the web which provides Buy and Sell indication on the chart(Especially Intraday Charts)

    2)Do Some Cosmetic Changes in the Trading System(AFL/MT4 codings)

    3)Open a Website and claim that your trading strategies have 90-95% accuracy in winning

    4)Promote in Facebook groups with some sample charts shows enormous profits

    5)Target to customers who really wants a trading edge and not aware about trading strategies or mathematical models. Sell it to them

  12. Rajandran R says:

    Apart from Stock Tips scam this how trading Signal Scam will work worldwide and many such stores are already running in india too

    1)Download free Programming strategies with Buy/Sell login available in the web which provides Buy and Sell indication on the chart(Especially Intraday Charts)

    2)Do Some Cosmetic Changes in the Trading System(AFL/MT4 codings)

    3)Open a Website and claim that your trading strategies have 90-95% accuracy in winning

    4)Promote in Facebook groups with some sample charts shows enormous profits

    5)Target to customers who really wants a trading edge and not aware about trading strategies or mathematical models

    1. Punit Gupta says:

      If someone says the guarantee or sure tips, make sure to run as fast as you can. Investing / trading is an art which many people have learned and such words do not exist in their dictionary. I have been trading for more than 4 years and I have NEVER seen anyone being right more than 60-70% of the times.

      In fact most successful traders I have interacted with have less than 60% hit ratios. They are just good at cutting their losses fast.

  13. Glen says:

    thanks a lot. being a novice investor, these kind of articles really help. please keep up the good work.
    I was wondering, why not randomly select 20 stocks and divide them ourselves and try our luck 😉

    1. You can do that ..

  14. Ashvin says:

    Dear Manish,

    I am really surprised to read this article. I am receiving daily SMS even without subscribing! I never acted upon that. I am also getting their calls.

    This is really an excellent article. I was about to subscribe again with someone but now I won’t.

    I wrote “again” because I have subscribed to one of such scheme naming “Crorepati” in one year. Initially stock moved up a bit but never reached to target of 1000 to 2000 times! Now, in loss though not huge. He is having experience of 25 years in stock market and so…

    Keep sharing such articles…
    Thanks.
    Ashvin

    1. No matter waht experience the other person has , you need to know what you are getting into . If you are ok with it , go ahead !

  15. @Mr. Manish first of all I Like to Thank you for sharing knowledge With Us

    I just came Acrooss your website in first look Its Is just like Normal website then As i am fliping page i realiase that in every artical you invested Your energy and Knowledge spacial in stock market and Money Article honestly i surfed Lot as i am related to science i have not any sense related to Money but None of website language I understand but in u r website it not same it cover little and basic principal of investing if you Know any other link which is help for non commerce ppl then please share it

    with best Regards
    One of Your Fan

    1. Thanks 🙂 .. Keep reading and I assure you will get more and more valuable links

      Manish

      1. Ganesh says:

        Dear Manish…
        I am trading aince lastone and half years and prefer to trade on intra day..
        I never made handsome money through it… just managed to cut my losses… now i am getting call from Capital Grow saying they qill provide me with a tip daily 4-5 stock investment msg qill come and I can start investing from min 5k… and they are telling only after i am satisfied i can suscribe to them.. subscription amount is 3000 per month…

        What do you think should i give a try?

  16. mansi says:

    Hi

    The Information on the blog is good, you are doing a great job

  17. Penchala Kumar M says:

    Hi Manish,

    I am also a victim of this type of a scam. I subscribed to such tips 1 year back. Initially i gained 20k & later lost 40k. I never thought that i fell prey to such a scam with simple logic.

    I always had a doubt in my mind… if a person is able to give tip to others, why can’t he invest & become richer…

    Now i feel that there in no shortcut to success…

    Good one Manish…Keep it up…

    Thanks,
    Penchala

    1. Penchala

      Sad to know that . Good that now you are clear about the fraud and have learned from it .

      Manish

  18. Rajesh says:

    Really good article Manish. Thanks for this eye opener 🙂

  19. sarath says:

    hi manish,
    i have been following you for about a year now. i like your blog. but this one you got it wrong. i know where you got this idea. this a common scam done in the uk for the football fans. you saw this on bbc entertainment and the programme name is The real Hustle. BUT i appericiate you as you have applied to your convinience.

    1. Sarath

      I came to know about the football scam after writing the post , the strategy is well known in stocks also and the same kind of stuff is written by others also , have a look :

      Manish

  20. Mohan says:

    Hi Manish,

    Nice to see the good artical again…

    I had subscribed to one calls team called capitalvia.com, vprofit.in and lost around 1 Lakh by doing trading for two months last year end.

    If i would have look any artical like this before i subscribed than i would have saved my money aswell as tension which i was facing when i buy the stock for 1 Lakh and going down for 3 – 4% down in just few minuates and touch the Stop loss.

    Right now i stopped trading and holding those stocks which i bought at very high price in last year September period and lost almost 30 – 50% as now.

    Your articals are always good and informative.

    1. Mohan

      You also lost subscription money and lost 1 lac above that . Its a big money and the cost of it can be big , because you could have used that 1 lac to do something better /

      Manish

  21. Flubber says:

    Very interesting scheme. However, one caveat is the guys on the wrong side (10000 – 156 = 9844) will bitch and moan so much in the public forums about the scam that it will shoo away most of the potential preys.

    1. Flubber

      You can see many schemes like that which had bad reviews all over the net, but still people buy them . There are many who will not fall for these schemes and find out from net and other sources . Thats the reason I have assumed just 20% of the TARGETS getting into the scheme

      Manish

  22. Surabhi Rajan says:

    Nice Article Manish!
    I remember 2 year back, how my friend bought subscription from equitymaster.com. Almost similar, they had some offer for small-caps, mid-cap baskets. They would suggest 4 to 6 stock out that 3 would have guaranteed return over 100%. Initially he had some success but lost money later.

    I’m not complaining that EquityMaster doing scam, but this is what happened to my friend. I don’t know much about that website too..

    1. Surabhi

      Great to know that , thanks for sharing that incidents . I would say anything which overpromises 15-20% should be taken with extra-care . there is no easy way we can beat mutual funds or index without taking more risk .

      Manish

  23. Anand says:

    Excellent one Manish.

    Here’s an attempt at one more:
    If I have a system that accurately predicts the prices/direction and I really have a conviction – then I can even take out a personal loan from a Bank+ buy onMargin and make all the profits myself. Why would I even share my so called ‘accurate’ research with someone even for some cost, right?

    Barring a few sophisticated stock research services (not that they all work, at least there is a strong reasoning why they came up with such a research reco) most of them are shams and scams, IMO.

    1. Anand

      Exactly . The only things which makes sense is to run a hedge fund and manage others money and take a cut , so that you play in big numbers and make enough profits and cuts which you cant make by your restriction of capital

      Manish

  24. Brajesh says:

    Hey Manish, No doubt this is one of the best from you !!
    Having said that, I have one doubt. There is a clear assumption in this concept that people are not exchanging ideas or communicating among themselves. In this age of digital communication where people live on facebook and Twitter, do you think such scam to work, given the tendency of people to share anything and everything with others having similar interest ?
    If this trick is tried on someone who is an informed person and likes to share the information with his/her friends, I doubt it would work out !!!

  25. Piyush Balasaria says:

    Great Article!! Its good to see an honest article once a while.

    1. Piyush

      Thanks , I hope you consider other posts “honest” as well 🙂

      Manish

  26. Firoz says:

    nice one manish..keep up the good work!

    1. Thanks Firoz

      Keep reading and send it to your friends as well

      Manish

  27. Lakshmi says:

    Hi Manish

    It was a very interesting article and very different from the usual….just alerts all of us as to how smart the scamseters are than us !!!!

    cheers
    lakshmi

    1. Lakshmi

      Yea .. But we come to know about their smartness most of the times after falling for their offers and tricks .

      Manish

  28. Hem says:

    Thanks for one more lovely article. Enjoyed reading it.

    But, I felt sad for a moment after reading this. How many ways people get cheated in this world? I really feel sorry for them.

    1. Hi

      Only 10% innocent people get cheated . more than 90% are those who are so greedy that the best lesson they can get is only after getting cheated .

      manish

  29. Bhavesh says:

    Hi Manish,

    This is good but practically not possibel as the con can hide anywhere and will traced and punished by SEBI and Police.. I am sure even bulk SMS and website can be traced with technology!!!! What you say ?

  30. Sandip says:

    Hi Manish,

    This is really an eye-opener article. One of the best. These kind of articles really matches with the name of your site ‘Jagoinvestor’. Definitely I’ll send this article to my friends. Till today I refer and tell my friends the things you wrote in ‘How highest guaranteed NAV in 7 years works’ , ‘disadvantages of endowment plan’ etc. Keep posting these kind of eye-opener article. Truely all these articles have changed my perception of selecting any financial product. Now it is up to the readers for spreading the awareness to their friends and relatives.

    1. Sandip

      Thanks for the appreciation . Keep reading !

      Manish

  31. SK says:

    I have been reading most of your articles, but this one takes the cake!! Couldn’t help not commenting on this. Appropriate little pictorial also.

    More than any grudge on the scamsters/tippers and any pity on Ajay’s of the world, I am just dazzled at the ingenuity of this trick. My hats-off to the inventor of this idea …

    1. SK

      Yes , i know , this trick seems to be to good to be true for some one who is in those 156 targets 🙂 .

      Manish

  32. Mr. Investor says:

    Manish: Value your thoughts and comments.

    Timing market and its valuation is always challenging and chameleon process. But one can always invest in Bluechip stocks for longer term taking into consideration the ripe effect of profit booking(say anywhere between 15-20%).

    SIP investment is wise, also along the road if one can book profits partially in stocks s(he) can gain and enter again and lower levels.

    For the best asset allocation, one has to have equity in his basket the % might differ accordingly.

    1. Mr. Investor

      Yes , I agree . All the investors need to have some part of their portfolio in equity , else expecting good returns is unjustifiable .

      Manish

  33. Mahavir Chopra says:

    Good one…Manish…Enjoyed reading it.
    Forgive my ignorance…beyond my domain…but…How is “Honest Truth” emails from Ajit Dayal.

    1. Mahavir

      I cant comment on that , no idea !

      Manish

  34. S S says:

    beautiful….this was simply lovely, Manish. I have always wondered how people fall prey to scams, now I got to know some of the tactics.

    1. SS

      Good to know that, I am sure there are many wondering how they get all right tips , but they dont know that they are just lucky targets . there are hundreds who got wrong tips

      Manish

  35. Sundar says:

    Manish,
    Nice one as usual.
    My own experience is as follows:
    1. All markets in the World are dominated by Big Institutional Investors like FIIs, Local Institutions and Pension Funds.
    Which Retail Stock tip giver can read the minds of these large players?
    Impossible anywhere in the world.
    So the best way is either SIPs or have patience and invest when the markets are down (when large players are bearish) and NIFTY P/E is at attractive levels.
    Finally only invest that part of your wealth which you are risk in the market. It can range from 0% (for extreme risk averse) to 100% for Rakesh Jhunjhunwala. But being out of the market is also foolish as you will get hit by inflation.
    I normally keep atleast 20% of my Portfolio in the Market. But if P/E of Nifty falls like it did in Oct 2008-Mar 2009, I increase my exposure to 65%. Then I come back to 20% when P/E goes up to 25.
    Everyone can have his own strategy. No need to follow any expert. They are no better than any of us.
    I read a interesting survey in 2005 from UK. A 8 year school girl beat all best Fund Managers in a stock contest in UK. So you know what is the level of expertise of these people.

    1. Sundar

      Great suggestions . Can you give that survey information about the UK girl ? I would like to read it .

      Manish

      1. Sundar says:

        Manish,
        Please see the following link;

        Also please search for the 5 year old girl Tia from London who beat stock experts this year. Do a google search.

        1. Sundar

          Thanks , I will look at it 🙂

  36. Ankur says:

    @Manish, congrates for well articulated article. Looking forward for many such eye-openers…..what is amazing about ur one page article is that it might be marketing strategy of high-paying-thinking-smart manager of investment firms…when these investment firms would think in favour of investors and still make money…..i mean is it too hard for any investment firm to be fair with their clients and still be highly profitable…what do you think.

    1. Ankur

      I am not sure if I agree with that point that a firm cant be fair to clients and be highly profitable , May be you are looking only to tips giver companies , but think about companies which add value to its clients in other ways , it can be selling something , consulting or whatever .

      Manish

  37. Ajay says:

    good one. reminded me of an episode of The Simpsons in which Homer gets tips from a pig that can predict the result of a football game :). Same logic was used…

    1. Ajay

      Nice to know that . I dont watch Simpsons 🙂

      Manish

  38. Vanga Rajendra Prasad says:

    Amazing.. Thank u Manish for ur analysis and blog. I want to quote you and your blog in my personal finance column in ‘Andhra Jyothi ‘ Telugu daily news paper. Hope you will not object…

    1. Vanga

      Sure , I would feel honoured 🙂

      Manish

      1. Vanga Rajendra Prasad says:

        Manish
        i quoted you and suggested your blog in Andhra Jyothi daily news paper to day in my coloumn

        1. Vanga

          thanks for that , any online link ?

          Manish

          1. srinivasu says:

            yes. manish your name is published in todays well circulated and trusted news paper, i felt very happy seeing your name.
            All good luck !

            1. Srinivasu

              Would be great if you can send me a snapshot or an online link ? Are you talking about Andhra Jyoti ?

              Manish

  39. smitha says:

    hi,

    Interesting…but if i am not wrong Vivek Kaul explained the tips scam in one of his write ups on dnaindia.com..

    Anyways good effort but despite your efforts i think still many people will fall for the tips

    1. Smitha

      I have not seen tip scam article by vivek , but this is covered by many bloggers earliar , even Deepak Shenoy did a post on this some months earliar .

      Manish

  40. Madhav says:

    Excellent article manish.

    Now, I can visualise my friends case and see how these scams will happen based on your article.

    One of my close friend case -he paid a small amount (around 1K/Qtr) to get tips [some 5years back] after attempting few free tips working fine. After few successful events, he lost a good amount of money(around 50K). After this shock he started investing only in MF 🙂

    1. Madhav

      I can imagine his situation very well . Even I had subscribed to some tips at one point in my life and it was all fake . Nothing worked like it did at the time of free tips .

      Manish

  41. raj says:

    Hi Manishbhai,
    excellent article!
    I think we should not rely on such tips,instead –
    1. we should choose 3-4 bluechip stocks only from different sectors
    ( eg.ITC, SBI, Petronet LNG, Coal india).
    2. Then keep regular watch on these stocks
    3. After 2-3 months U will get idea of movement of stocks
    4. Then buy stocks whenever price is low
    5. When U get 10% profit, sell 50% stocks
    6. Again buy at low & sell at 10% profit
    Pl comment on my strategy.

    1. sanjeev says:

      hi Manish
      Pls also reply on raj comment so that we will learn the methology of investing. otherwise pls give us a simple and understandable method which helps us in trading. thanx for this great advice.

      1. Sanjeev

        there is no “simple” strategy for trading , trading is one of the thoughest things I can imagine , I am talking from descipline and control on one self point of view and not from knowledge points .

        Manish

    2. Raj

      Can you imagine how tough your strategy is to follow ? Emotions take over at times and all the plan will be messed up , in your strategy , how do you handle the bad scenarios when you are in profit, how long you wait ?

      Trust me , its easier said than done 🙂 . I have been there 🙂

      You also try to follow your strategy and you will know

      Manish

  42. Sushil says:

    YEs Excellent Analysis, thanks for the post.
    I usually get these sms daily, and unfortunately the very similar things happens with me…..i got all the 4-5 trail tips excellently 100 % ok but when i paid and subscribed….i lost in 6 figures……later after 4 years again i tried the very same thing and again the similar things happened with another tips provider……everything FREE was excellent but paid performace gave me loss of much more

    1. sanjeev says:

      yes it happened with me also, First i have had a loss in 2008, but now again i re-trade for more but its actually are for loss, i have subscribed to dsij, when they give me tips for intra, but before my buying its jumps upwards so fast, and i see them steadly but i don’t get profit so much one day of profit and fivc days of loss. net result sometimes i think this is not my cup of tea. i mean intra day. if you have any other idea which i have to use pls tell me.

      1. Sanjeev

        I can imagine that you thought thats its easy , but trust me , I have done it myself and its not cup of tea for 99% people on this earth , a common man should go through mutualfunds or direct stocks if he has time and interest (mainly long term investing)

        manish

    2. Sushil

      thanks for sharing your case , that confirms that these tips givers use this same strategy .

      Manish

  43. rajeev says:

    Some of the assumptions are exagerated
    – 50k for subscription (you need to be super fool to subscribe that no matter how accurate the tips are).
    I am not totally against the tips as long as subscription is not more that 2% of my exposure
    Tips are provided based on techincal/fundamental analysis rather than news and maniputations

    No tips can be 100% accurate and even though I subscribe to 50k HOT TIPS One show always always follow stop loss and target.

    Lets accept the fact that there are some people who do want to make money for the effort they put in gathering and analysing the data.

    Take moneycontrol.com valueresearchonline.com and there are loads of them (Even if their model is ad based but still they are making money out of their gathered and analysed data)

    Rajeev

    1. Rajeev

      Dont take those numbers as fixed , its only for communicating the idea and logic , look at the main learning .

      Also there are tip givers who charge 10-20k per year for their tips and people pay for it and they dont give that kind of performances which is shown in the article , 50k as fee for something which is so accurate will definately find the subscribers , greed has no limits , atleast in markets

      Manish

      1. rajeev says:

        Only point I wanted to convey was people should not think that all the tip providers are making fool of you.
        Its upto us to differentiate between genuine/one who had done some analysis and the one shown above.

        It is easy to say that you can do your own analysis and enter when price is low and exist when price is high. If it would have been that simple John Murphy would not have written a bible on technical analysis 🙂

        1. Rajeev

          Note that no one is commenting on Technical analysis , I am myself a big fan of Technical analysis and I myself use it , The article is just on the tip givers promissing high returns .

          There are many good tip givers in market and those people come on tv also and they talk real sense at times . An example is Sudarshan Sukhani and Ashwini Gujral , both are good technical analysts and have paid services, and all of these people promise only realistic returns like 3-5% a month and thats very much in limit .

          Manish

  44. manish verma says:

    gud article Manish…. enjoyed and learnt

    thnks

    1. Manish

      Good to know that . Keep reading 🙂

      Manish

  45. Giridhar says:

    Unfortunately, a person will loose not just the subscription money but also the investments made as suggested by random tips. Its like in any business – selling substandard products – people will be wasting money on less quality products and also face consequences of using them.

    1. Giridhar

      Yes , if you look at the article , other than those 156 targets , even other person might be loosing some money if tips go wrong (which definately will for them) .

      Manish

  46. Joy says:

    Hi Manish, Good Article. Since last 1 month, i have been reading your blogs & beleive me , my entire way of thinking about personal finance has been changed now. I have learned so many things from your blog. I would say, “people perish (do wrong investments) lack of knowledge” , same things happened with me as well. Thanx for your efforts & courage. Good job, keep it up.

    Joy

    1. Joy

      I will beleive you 🙂 . It has happened with many readers and with every client of ours 🙂 .

      Manish

  47. Abhishek Kadiyala says:

    Investment in stocks is not gambling (though it looks like gambling if you are trading stocks instead of investing)
    I am not an expert and I dont make 30-40% returns. But using below tactics I make atleast 15% returns:
    1. Research and find chalk out a list of stocks you want to invest (start with 2-3 large cap stocks)
    2. Look at the fundementals and anayze the balance sheet. You need not be an expert to analyze a balance sheet. google it, you will find many wonderful pages which tells you how to analyze balance sheets.
    3. Track the price of chosen stocks for weeks and buy on dips. And since its impossible to know the bottom price invest regularly. May be 5K one time.

    If you dont want to take above pain. Invest in SIPs.

    1. Abhishek

      What you are doing is fantastic , infact doing that much requires a lot of will and discipline 🙂

      Manish

  48. B says:

    Hi Manish,

    Enjoyed reading this post.. Reminds me of the speech … and the article on “The Superinvestors of Graham-and-Doddsville” (article can be downloaded at http://bit.ly/mImmJx )… also this nice article below says why you should not rely on tips… http://bit.ly/ll3b9d

    1. B

      Thanks for providing those links 🙂 . Will look at them

      Manish

  49. Anand says:

    Ha ha.. good article..

    Reminds me of equitymaster… They pump your inbox with many mails with tall claims.. and at least one of their schemes disappears forever at 5 pm daily… 😀
    (which they keep on extending :)) But I must admit they have good writers with them… If you are not strong, it’s very easy to fall prey…

    Has anybody tried their schemes?

    1. Anand

      I have personally not tried it . Why do you think they make tall claims ? Did you happen to track their advice and see the results , may be you can share your analysis and experience ?

      Manish

      1. Anand says:

        Hi Manish and others,

        No, I never subscribed to equitymaster.
        They claim that they can double your money in 3 years.

        See today’s mail from equitymaster:

        Dear Reader:

        My research team has identified 3 small cap stocks that can earn your regular income for life, even if their prices do not move an inch.

        But I’m giving access to these stocks only to the first 1,000 people who sign up for our small-cap recommendation service, Hidden Treasure.

        I’m personally convinced that we’ll hit this limit very soon as subscriptions are coming in fast.

        That’s why, please do not forward this email to anyone, or you might miss on this brilliant money-making opportunity.

        If equitymaster is getting money from each subscriber, why should they limit it to only 1000 people?

        Many people are subscribing to this: this looks the same statement when a builder says that only few flats are left! LOL.

        Finally, why we should not fwd email… this does not make sense..

        All in all, this looks completely fishy…

        that’s why i was asking, if anybody is repenting on subscribing to equitymaster…

    2. Hi Anand,

      I agree with your comment on their some or the other scheme expiring today at 5:00 pm. I always keep reading this in their promotion emails. But the scheme keeps making a comeback every now and then in a new avatar…… 🙂 mind you I have nothing against their research and tips as I have never tried any of their schemes …… so can’t comment on that!!!

  50. Mithlesh says:

    hmmmm!! Beware of manish and his tips :)-

    Thanks for the excellent article mate!!

    1. Mitihilesh

      I agree with you , even what I say should be taken with care and another level of analysis should happen on the readers end and based on that decision should be taken

      Manish

  51. umesh says:

    good article, helps to understand the industry. thank you

    1. Umesh

      Good to know that this article has helped you to know the industry ! . but how ?

      Manish

  52. Nagarajan Santhan says:

    Hi Manish

    Really nice article with clear pictorial representation.

    I stopped share trading and moved to MF (SIP) a years back 🙂

    When I was in share trading, I had lot of tension, time spend to monitor market, etc ….. simple to say “under tension”.

    Now in MF no tension, no time wasting and mostly concentrate to my work …

    Once again thanks manish for this good article

    Nagarajan S

    1. Nagarajan

      I can understand what you are talking about (tension) . I have gone through that myself 🙂 . Its better to stay away if one is not that serious and go through SIP route only

      Manish

      1. Nagarajan Santhan says:

        Correct Manish. Thats my way now 🙂

  53. Hemant K U says:

    manish can u explain to me sensex@mrp in simple terms???

  54. Hemant K U says:

    Manish thanks for the timely warning. I am being pestered by 3 different outfits for subscribing to their ” multibaggers ” etc with fancy names, and the subscription it is always going to close by so and so midnight. If I had not to accidentaly read your article I would have surely fallen prey.

    1. Hemant

      Good to know that this article saved you 🙂 . Please help in spreading it to your friends as well , so that others can also be saved ?

      Manish

  55. Imon says:

    Hi Manish,
    This is my first post in JI, but have been a long follower. Always wondered how some people give guarantee on stocks. You just showed me how!! . Have been enlightened about many things thanks to you, but this is surely one of your best.

    I personally follow one philosophy in life. Do not put your money in something where you don’t know how it is supposed to work. If you do, then its a gamble and a gambler never quits on a winning note.

    -Imon

    1. Imon

      Your phylosophy is right ,thats how it has to be , people who dont follow it can only rely on luck for success .

      Manish

  56. raju says:

    Manish,

    Fabulous theory and practical.
    Nice work again.Nothing is free in this world except free advice.

    Regards,
    Raju

    1. Raju

      thanks for appreciation . Good to know that you liked it , Did you ever some across such tips ?

      Manish

  57. Archana says:

    Hi Manish,

    As usual your articles at your best.
    In order to gain anything you have to work for it…its like for passing the exams there has to be an effort. Either to study well or to copy well (from the right person) ….whatever there has to be EFFORT.

    Similarly there is no easy money through investments…either we are well aware of Personal finance or we are not….nothing in between.

    Not being sure about your investments/portfolio = not being sure of your returns too

    Regards
    Archana

    1. Archana

      thats a great line you gave at the end , one who has no idea of portfolio will also not have any idea of how much return they are making 🙂 . good one .

      Manish

  58. allthecrap says:

    Manish, I think I have already read this article some years back in may be a mailing list. Its your original thought? Or an ‘Inspired’ version?

    1. T.S.ASHOK says:

      Hello Allthecarp,

      Wheather it is ‘original’or ‘inspired’..that doesn’t matter..It is a big eyeopener for us..Many people will be saved like me from those kind of mails..Thanks to Manish once again..

      1. allthecrap says:

        I know its an eye opener for many. I just want to know the source As I don’t remember where I have read it before.

        I am not objecting or accusing anyone. I think Jaago is the only site I follow religiously. Manish is a great blogger.

    2. AlltheCrap

      Its not an original thought, how can it be , its the one which is used by scamsters , so I can only highlight it , but we have to appreciate the person who devised it for the first time . Infact it more of a problem solving question , if one understands binary trees and probability distribution , its pretty intutive 🙂

      Manish

  59. Ramesh says:

    Manish… it is something different from the regular one and I like it very much…wat a trick and nice article…
    I always love ur blog and it is my first finance educational site found in google search.
    the main reason to love ur blog is your response to the user comments, queries, etc

    1. Ramesh

      Yea , Even I enjoyed writing it as it was very different and hat-ke topic 🙂 . Good to know that jagoinvestor is your first site on finaicial knowledge 🙂

      Manish

  60. Jagadees says:

    Ha Ha very nice alert for retail investors from falling prey to those intelligent operators…. Recently i read an article of similar note from prof.sanjay bhakshi written way back in late 90s…. Its really startling to know that these scheme of things works very well even after 15 years and really sad that people still fall prey to these schemes!!!! Human greed has no bounds 🙂

    Regards
    Jagadees

    1. Jagadeesh

      Can you forward the link for that article ? Is it on Sanjay Bhakshi’s website ?

      Manish

    2. Bala says:

      Only shows that there is an idiot born every minute.

      1. Bala

        Which comment are you reffering to ?

        Manish

  61. Prashant Shetty says:

    Manish,

    Amazing article. A real good one.

    Very useful for beginners like me.

    Thanks

    Best Regards,
    Prashant

    1. Prashant

      Thanks , As you a begineer , I would like to just say that dont look for too much of actions , not doing anything can also be fine , people who are really messed up are those who tried very hard to improve their personal finance

      Manish

  62. prabeesh says:

    Manish

    Excellent,i was trying to find article which describes the tips scam.. you came up before i found one 🙂 I have shared with my friend in Facebook.

    @Ujjwal
    Yeah i remember in my childhood days big people talking about this and buying Teak trees from governmet farm where my father was working.

    1. Prabeesh

      Thanks for sharing this on FB . Can you let me know what was that teak trees scam ? I have no idea about it ! , but I can guess now

      Manish

        1. Prabeesh

          Thanks for hte links , I will read it at leisure !

          Manish

  63. chandermani says:

    This scenario is only valid for actions which have limited out comes. Sports betting has also been affected by such a scam.
    I strongly suggest anyone serious about investing in stocks should reads Nassim Taleb’s “Fooled by Randomness”. Sometime one is plain lucky but credits his success to his abilities.

    1. Chandermani

      Yes, I have read it , and you can also see what you said in this strategy , the tip giver is percieved to be smart , but he is not smart , he is just lucky

      Manish

  64. Veman says:

    Hi Manish,
    I am receiving mails from equitymaster.com on stock tips.They have some subscriptions called “Hidden treasure on small caps” etc….
    everymont on 15th they will send a mail which small cap we can buy,target price,holding perios,etc..
    As of now they are offering at 40% discounted price(2950 Rs instead of 5000 Rs).
    Do you have any idea on this website “Equitymaster.com”. they are claiming that they have some research team,etc…
    Comments from any other jagoinvestor member also welcome….

    ——
    Veman

    1. Veman

      Equitymaster is more of research company and not just a stock tips giver . There are many views from its members on how good or bad it is . some people I know have bad and good experiences , So better do your own research on this

      Manish

  65. Mathu says:

    Nice eye opener. Am gonna forward this to all my colleagues.
    Coincidentally I was reading about thepremiumstocks.com today. I used to receive sms from them saying today booked Rs.xxx k profit from xyz stock.

    1. Mathu

      Thanks . please forward 🙂 . The sms’s which you are getting are more of results of thier tips , which you might not have got , its just a way to showcase how great they are ! . Dont fall for it

      Manish

  66. Ujjwal says:

    Manish,

    Once again good article. It shows how easy it is to fool people. We all have succumbed to some sort of Ponzi scheme. I still have a certificate of Teak Plantation scheme which was quite popular 20 years back. They promised us to give very high return but within years the whole scheme collapsed.
    My firm view os for more than 95% of the people it is better to play the slow and steady game of SIP in some good mutual fund. Most good mutual funds are beating the benchmark index by at least a couple of points any way. How much an amatur investor can make in the market anyway!.
    But again, greed and fear are the name of the market and we fall take wrong decisions based on these two emotions.

    Ujjwal

    1. Ujjwal

      Yes , Most of the people should go through the SIP route in stock markets , thats the best way for a common man to earn good returns in long run with least involvement 🙂

      Manish

  67. M S Kamath says:

    Excellent article Manish. I do get these unsolicited tips by SMS. Never have i responded/acted to these.

    1. MS Kamath

      There is no alternative to personal research in stock markets , if you act of other tips , then you are purely responsible for what happens later . Better unsubscribe from those newsletter which sells stars and moon to you .

      Manish

  68. Ahmad Zaib says:

    What an insight Mainsh. Never could have imagined it like this 🙂

    Thanks for such lovely articles…

    1. Ahmad

      Thanks for compliment . I can understand how you must have felt after reading it . Its a enginerred way of “showing talent” .

      Manish

  69. kalpesh says:

    Hey,
    Nice article…thnx for sharing. I wonder if d guy can jus run away wid like 10000ppl x Rs.50000…as he never gives any gurantee or anythin in writing jus tell us to deposit in some account…rather to wait till 156 members…may b to earn little more…

    Also I do get some msgs abt tips n have observed it but they are not successful …n I never really itend to follow any…except few close ppls calls…
    Well thx for showing truth….

    1. Kalpesh

      People are so greedy and blind that they really deposit the money based on just “trust” .

      Manish

      1. kalpesh says:

        Hey thbx for u r views…these things happn coz ppl r not aware of what kind of research needs to be done before investing n hence look for a direct way of paying gettin calls.
        It would be great if you can share ur knowledge on research front as to hw to select stocks ,what research should be done n hw to decide, for both long n short term….
        Hope u come out wid thses articles n help investors thnx

        1. Kalpesh

          While you are right, I also want to add that people also fall prey to these schemes because they lack the basics and dont have right expectations , If some one is offereing 50% return without risk , its just a plain lie ! , but people dont understand it .

          Manish

  70. Excellent article Manish. I do keep on getting lot of SMSes (Hot Tips). Thankfully I never decided to test any of them whether they work or not. I have forwarded the article to my friends in case of whom there is a possibility they may fall prey to such schemes. It will definitely help them to understand how this TIP modus operandi works.
    Thanks once again for the excellent article!!!

    1. G0pal

      Thanks for appreciation . Even you have subscribed to these sms’s ? I did it once years back and learnt hard way when no tip worked and I lost my fee money 🙂

      Manish

      1. Hi Manish,

        I never subscribed to any of these SMSes tips. These people go on sending random SMSes to any numbers. So at times I also get such SMSes.

        Otherwise also it is not difficult for marketers to get a person’s mobile number from anywhere. They can take your mobile number from your website and subscribe you for their tips ……… its as easy as this to get a person’s mobile number and put them in the subscription list……. 🙂 ………. its difficult to control unless you are a member of ‘Do Not Subscribe’ list.

        Thank God we don’t have a mobile number directory like we had for landline numbers, else these marketers would have played havoc with our mobile numbers with their smses!!!

        1. Yea .. But you always can get a list of phone numbers for a price . I wonder why all the handsets dont have a feature of blocking a phone number so that you never get a sms or call from that .

          Manish

  71. Sourabh says:

    thanx manish
    i m getting this kind of mail… man u just saved me….

    1. Sourabh

      Really, you were going to subscribe for one of those ? Dont subscribe for the sake of it , the sms’s just take away our energy and deviate our minds !

      Dont you think so ?

      Manish

  72. SV says:

    this I would say is by far the best of urs.. excellent..

    1. SV

      Best ? Really ? Good to know that , but for me it was a very regular one , but a very different one 🙂

      Manish

  73. Pratik Agarwal says:

    Read the same thing somewhere, probably this technique was used to predict some football game results by some one, anyways nice read 🙂

    1. Pratik

      Really ? I am not sure how it can predict a game result ? May be they assign a probability to one branch and so on and that way they reach out to one of the subtrees 🙂

      Any link ?

      Manish

      1. pratik agarwal says:

        Here is the link :

        Actually this isn’t the same link I read, but you may have a look 🙂

        http://www.skepdic.com/perfectprediction.html

        1. Read that .. looks same 🙂 . Actually its better as in that example, there is communication at each level and that helps in building more trust 🙂

          Manish

  74. Rakesh says:

    Manish,

    Excellent Analysis, thanks for the post.
    I usually get these sms daily, quite tempting at times.

    Rakesh

    1. Rakesh

      Not sure if you also trach their performances on regular basis . Some times these poeple just randomly send the tips and try to highlight the one’s which does make the money and hide those which does’nt 🙂

      Manish

  75. ankit says:

    Awesome…

    1. Ankit

      thanks , could you share if you have come across such tips or not ?

      Manish

  76. ajay patel says:

    This is fantastic article Manish. Excellent piece of analysis

    1. Ajay

      Thanks . Keep reading and forward it to your friends as well .

      Manish

  77. Vidyasagar says:

    🙂 Hilarious but true. My learning: “Never time the market. Invest regularly via SIP”

    1. VidyaSagar

      your learning is true in general and good for most of the investors , but for serious people in market , long term timing of market becomes necessary , obviously they look for more than normal returns 🙂

      Seems like you are normal investor expecting 12-15% returns at max in average case . Are’nt you ?

      Manish

      1. Vidyasagar says:

        Yes Manish. I am just starting off and with the limited funds I have I would not try for bigger returns and burn my fingers. 12-15% is decent enough.

        But, in the future as I learn various tricks of the trade with experience, may be I would look for more than normal returns. 🙂 Even then, there’s no such thing as a free lunch.

        1. Vidyasagar

          Yes , 12% is good enough returns to be expected , especially if u can get it over long term , Its good .

          but getting more than 15% over long term really requires lot of smart work 🙂

          manish

          1. Karthik says:

            Hey Manish, Timing the market rarely works and hardly matters. It is better to buy the stock at 40% discount to the intrinsic value and sell it once the companay is over valued or is no longer growing at a phase you desired.
            Expecting anything more than 15-20% hardly works over a long period of time. I will really sceptical if someone tells me he has earned 30% return for the past 20 years.

            1. Kalpesh says:

              @kartik: well it is true tht v should buy stocks at steep discount n sell high…but which is tht stock which is really v low? how to identify such stocks ? many investors are not aware of such things …if you say research or do homework on your own…soo what exctly does this home wrk means..?? soo if you can educate the investors about how to research and select stocks better help out ppl…n share knowhow here…

              also if you have any investment ideas do share wid ppl…

              🙂

            2. Karthik

              What you are saying is not that easy to do in real life , it takes more than a normal investor to do all these finding and I agree that only then one can get superior returns compared to an average return .

              Manish

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