What you need to know about Online Social Networking (Responding to Don's post caveat emptor v2.0)

Responding on Don Montanaro's post titled caveat emptor v2.0

I want to make some comments about Mackey's action, character and the responsibility of each individual on an online social network (i.e. blog, group or message board)

1. Mackey's action isn't good (regardless whether it's legally right or wrong). It reflects his character and to some degree his integrity. I wouldn't hire him if I own a company (if I know that he would do such things). Anyway, he's the founder/owner of the company (Whole Foods), so probably he can afford to do (or get away with) that.

2. In an online social networking environment, every individual is responsible to do their own due diligence and take whatever they read with a grain of salt. It's true that the badge and/or certified trade would add some degree of credibility but that still doesn't replace the responsibility to apply some common sense and in-depth research (v.s. blindly following others regardless their credibility status). As Don pointed out, there will always people who try to game the system. As TK could also be only one of the many account that an individual has (if I rememebr correctly, Don mentioned about this too before), and many manipulation techniques (i.e. pump and dump etc) can occur by utilizing the blog, account holder badge, certified trade badge and multiple/external accounts.

3. Having said all that, the account holder badge and certified trade badge surely will help to separate those who talk the talk and walk the walk, vs the ones that could be talking nonsense. I've been watching the certified trade myself and it is very interesting to see. before TK, there is nothing like this and I like this transparency. Even without the trader explaining why and what they are doing, the trade itself speaks volume.

4. Lastly, trust and credibility can be built only through time (and somewhat similar to building relationship). It will (and it should) take some time for someone to earn trust from others especially in the public (and often anonymous) community (even with amazing stock return proven by the certified trade). Follow their track record, their behavior, ethics, integrity, and see if what they say/do/post are consistent through time (so on so forth), before trusting them.

Happy Investing!

Sidarta Tanu

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Comments from Don
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Posted by: Donato Montanaro on September 6, 2007 7:49PM EST

Well said, Sidarta! I couldn’t agree with your three points more. I especially dug your points in #2, recognizing both the limits and the opportunities that our Certified Trades feature offers. It’s true: no feature, however advanced, can fully replace good, old-fashioned common sense and caution when considering the advice of strangers. We’re working hard to build more transparency into our community (without sacrificing privacy), but keeping your wits about you is always solid advice, too.

Honestly, Mackey’s actions are just mysterious to me. In addition to questioning his integrity, I’d be just as worried about a CEO who spends valuable time on petty trickery that’s unlikely to achieve anything useful but tarnishing his reputation and that of his brand – and he certainly seems to have accomplished that.

Thanks for your insights, Sidarta!

Be Good,

Don
Note: Any strategies discussed or securities mentioned, are strictly for illustrative and educational purposes only and are not to be construed as an endorsement, recommendation, or solicitation to buy or sell securities.