One of the biggest stock promotion schemes ever recorded was the South Sea Company of the 1700s. That’s 300 years ago. A bunch of guys claimed they had the greatest sea shipping company ever and pumped it into oblivion. Even your great-great-distant-cousin-twice-removed Sir Thomas Marcus Bob was hearing about this stock.
In the book Extraordinary Popular Delusions and the Madness of Crowds, the author Charles Mackay, referred to the promoters of the South Sea Company stock as Night Wind Hawkers. They sold shares on the streets directly from the bag on their shoulders. “Hear ye, hear ye, who wants unlimited profits from the seas?”
What I find fascinating, is these Night Wind Hawkers still exist today. The only difference is in 1720 they chanted on street corners wearing knickerbockers, boots in mud, and watching horse carriages pass by. Today, these new age Night Wind Hawkers are on social media, wearing boxers at their computer, creating viral content encouraging you to buy (or sell).
So the medium has changed, street corners vs. computers, but the message is the same.
For me, one thing I always have to remind myself, is that no one is better at selling a dream than those in financial markets. Money makes anyone into a great story teller. “Dude you have to buy this because it’s going to change the way…” The new age Night Wind Hawkers are out there, doing just this.
So anyways, I wrote this post because it’s important to me and the way I see markets. Carefulness is a skill. There will always be fraud and deception out there, especially in markets. One of your goals should be to avoid it.