Never blindly trust the stock god's stock recommendations

This article is reprinted from: Economic Daily

Li Hualin

With a million fans and cloaked in the “rich second generation” persona, it seems like they are guiding fans in investment, but in reality, they are working without a license and illegally promoting stocks. Recently, securities regulators and public security departments jointly cracked down on a number of illegal stock promotions and “black mouth” influencers, tearing off the glamorous disguise of these investment “gods.”

The wave of traffic from short videos and live streaming has ignited a surge of so-called financial bloggers. These individuals speak confidently about individual stock trends in front of the camera, pushing stocks and calling trades to their fans, treating serious investment as a business for harvesting traffic. The relevant laws are clear: engaging in securities investment consulting requires approval from regulatory authorities and obtaining the appropriate qualifications. This is akin to needing a license to open a restaurant or a driver’s license to drive, in order to ensure professionalism and maintain a baseline. Relying solely on a persuasive tongue and a carefully crafted persona to cross the line into stock promotion, and even market manipulation, poses immense risks and harms that are self-evident.

Although the law expressly prohibits it, new “stock gods” and “investment masters” emerge on major social platforms from time to time. The root cause is simply the lure of profit. The tricks of illegal stock promotion are not complicated: flaunting luxury cars and watches today, showing off doubled returns tomorrow, first establishing an image of being wealthy and knowledgeable about investments, and once fans are convinced and willing to follow, they start charging membership fees or consultation fees, or directly guide followers to buy and sell, lifting the behind-the-scenes funds while offloading stock. Following this process, they make a substantial profit. Faced with the enormous temptation of profit, some are naturally willing to take risks, casting aside the legal red lines.

On the other side of the screen are ordinary people’s simple desires for wealth appreciation; on this side of the screen are meticulously designed harvesting schemes. People continue to fall for it, naively trusting the “stock gods,” because they lack sufficient understanding of investing and are always looking for an easy and profitable shortcut. Some investors, especially those who are new to the market, yearn for overnight wealth, fantasizing about achieving financial freedom by hitching a ride, hoping someone will directly tell them what to buy and when to sell, surrendering control over their investment decisions, forgetting the simplest truth: if there were indeed guaranteed profits to be made, who would be shouting about it online?

The platform’s oversight is often merely a formality. Investment and finance concern the wallets of millions, and the review process should be more cautious. In reality, some platforms are fully aware of certain accounts engaging in illegal stock promotions, yet they are reluctant to give up the traffic benefits and commercial interests, pretending to be oblivious while choosing to turn a blind eye. Only when things escalate and regulatory authorities call them out do they hurriedly “permanently ban accounts.” If platforms treat traffic merely as a business without remembering they are also gatekeepers of information dissemination, not only the vast number of investors will suffer, but they will also deplete their own credibility.

This time, regulatory authorities have taken action, arresting individuals and sounding the alarm. Under “zero tolerance,” illegal stock promotions by “stock gods” have become more complex and concealed, often disguised as knowledge sharing or personal documentation, making evidence collection and identification difficult. To thoroughly rectify the chaos of illegal stock promotions, regulatory authorities need to continuously upgrade their regulatory methods, effectively utilize new technologies such as big data and artificial intelligence, enhance monitoring of abnormal stock promotion behaviors, and establish a blacklist system for accounts that repeatedly offend, achieving cross-platform joint punishment. As a bridge connecting content creators and users, platforms cannot just calculate traffic without considering risk; they must take proactive steps, being vigilant about accounts that lack qualifications yet speak extensively about stock trends and induce trading, limiting traffic where necessary and banning accounts that need banning, truly becoming purifiers of investment information rather than boosters of illegal stock promotions.

There has never been a shortcut in investing; relying on “stock gods” for guidance or insider information often results in paying tuition fees. For investors, rather than blindly following the crowd, it is better to calm down and improve oneself; what is truly reliable is only one’s own rational judgment and the practical experience accumulated over time.