It’s honestly breathtaking how dumb a person with some extra cash and a trading account can be. Allow me to illustrate.
One of the few stocks that has been thriving through the entirety of this crisis has been Zoom Telecommunications (ticker symbol ZM). Since everyone is trapped at home and doing video conferences, Zoom’s service has been getting a tremendous amount of use and attention. Their stock chart, naturally, has the hallmarks of a successful bullish play: strong prices accompanied with surging volume.
Since some of our fellow countrymen apparently can’t write their name in the ground with a stick, they have – – perhaps having heard on the tee-vee about something called “Zoom” – – rushed out and gobbled up shares of ZOOM. May I interrupt this broadcast for a moment and show you, after an exhaustive two seconds of research, what the company represented by ticker symbol ZOOM does:
Yes. They plan to engage in investment in mobile or some such thing. They’ve got plans. Maybe even written plans. But they’re not freakin’ Zoom Telecommunications.
Returning to our tale, here’s what the chart of ZOOM looks like recently:
The irony to this is that while ZM has legitimately been thriving as a business with real customers and real revenue, its stock is “only” up about 100%, whereas its doppelganger ZOOM is up almost 2,000%. Remember, this is based on a mistake. It would be the equivalent of hearing that Apple was a very solid investment and rushing to the grocery store to buy all the Honeycrisps you could put in your shopping cart.
