Market Musings: Stock Tip of the Day?

When markets are in an uptrend, we have no dearth of 'TIPS TO BUY'. Even people who have little knowledge of the markets, maybe the roadside paanwala or the neighbourhood rikshawwala, will also dish out a tip or two.
It happenned during Harshad Mehta's time, it is happenning again, 'cats and dogs' stocks hitting the upper circuits on a regular basis without supporting fundamentals.

I am reminded of an anecdote relating to Harshad Mehta:
In those days Harshad Mehta had the 'midas touch', anything he was associated with started to climb in the markets. People used to track Harshad Mehta's moves like mad. One day a liftman incharge of operating the lift at BSE had Harshad Mehta on the lift, and he was talking to an official of Karnataka Govt. about investment plans in the state. The lift man heard the Karnataka official tell Harshad Mehta that if you invest in Karnataka your investment is likely to double in a short period. The lift man immediately got hold of his freind selling new issue forms outside BSE to find out if there was any listed share by the name of Karnataka. Soon he found out that there was a company by the name of 'Karnataka Ball Bearings', which was a sick company and the share was quoting at around RS.4 per share. The lift man who had some funds with him ordered for buying 2000 shares of the company, and recommended the share to his freinds telling them that Harshad Mehta is investing heavily in this company.
The rumour spread like wildfire as 'The Tip of the day' and there was a mad scramble for shares of this company. The share started hitting the upper circuit regularly and jumped to over RS.10 soon. One day a friend of Harshad Mehta enquired from him about his investment in the company and its future prospects. Harshad himself was surprised that how this stock had appreciated so much, just because people were buying it as a Harshad Mehta stock. At that juncture Harshad himself bought over 1,00,000 shares of the company. As soon as the news was out there was a volume jump in the counter and the stock touched a three figure mark within days. At this juncture Harshad sold his shares in the market, but the common investors like the liftman hung on to their investment, in the greed of making more money. Soon the stock trend reversed and it started hitting lower circuits consecutively and the stock came back to Rs. 4 again.

The moral of the story is: 'Beware of hot tips and the Tipsters'. Do your own research and analysis before investing.