Seeking Alpha is a very popular site for stock investors, becoming an extremely vibrant community of writers and readers who analyze most every stock that is traded on the American exchanges. If you are thinking about buying a stock and want more information before you buy, you can most likely find both pro and con reasons that may help you make a decision.
But There Is A Problem
The big problem that you must be aware of with Seeking Alpha is that anyone, and I mean absolutely anyone, can write and post an article on the site. It doesn’t matter who you are or what you know, if your article can get by the very liberal Seeking Alpha editors, it will be published. Right now the site boasts more than 13,000 writers (contributors) and while that sounds impressive, it really isn’t a good thing. That’s because out of those 13,000 contributors there are probably only a couple hundred that are qualified to give stock investment advice.
Before you go to Seeking Alpha and start basing your buy and sell decisions on what you read there, be aware that you might be reading something written by a business student, a plumber, truck driver, or most anyone at all. Many/most writers are trying to use the SA platform in hopes of making a couple bucks on the side through the clicks they get for their published articles. In other words, their opinions are completely worthless.
An Example Of Really, Really Bad Stock Advice
Michael Blair is a prime example of how you can be hurt if you blindly read the stock recommendations on Seeking Alpha without knowing who is writing them and whether they know what they are talking about. Readers have long speculated that because he is Canadian and often writes positive articles about Blackberry (a Canadian company that has been decimated by the Apple iPhone), Michael Blair transfers his hate onto Apple.
For context, here is the chart of AAPL showing a low of $90.52 on May 13, and its steady trek up to over $140 per share as I write this. That is a gain of more than 60%!
Apple stock in the last year has been a phenomenal holding, one that you wouldn’t want to have missed out on, And yet, Michael Blair has continued to pound the table against Apple telling readers what a bad investment it is/was. His recommendation is always to short AAPL stock, sell it if you own it, or to stay away from it. Here are some examples of his very bad Apple stock advice after May 13th, 2016 during its very impressive run up to where it is now:
Apple Outlook Dims As Analysts Continue To Cut Estimates – June 3, 2016
Apple’s Greed Stifles Growth While Amazon Forges Ahead – June 7, 2016
Apple Heading Into A Weak Quarter – Downside Risk Prevails – July 10, 2016
Buy Google And Sell Apple As Pixel Gains Traction In Smartphones – October 11, 2016
iPhones Are Hot Right Now, But Not In A Good Way – October 17, 2016
Apple Q1 Success By No Means Assured – November 22, 2016
Weak Demand May Impact Apple Stock – January 16, 2017
Any investor who was thinking about buying AAPL during the last 12 months and randomly stumbled on one of these ridiculous Apple hit pieces by Michael might have been persuaded to stay away from the stock. They would have had no way of knowing that he has a personal agenda against Apple and will write bad things about the company no matter what. All his investment advice should be completely ignored!
You Have To Know Who The Writer Is
Seeking Alpha can be a good resource if (and only if) you take the time to get to know the writers and figure out which ones are reputable. The vast majority of them are not and so it may take a long time for you to figure out the charlatans from the ones who really do know what they are talking about. Just like stock investing itself, you have to put in time and work to get real value.
But the danger with SA is that most readers don’t have the time or the desire to do that and end up putting too much trust into too many of the stock articles and recommendations. That means they are using bad information and bad opinions as one of their reasons for their buy and sell stock decisions.