Investor Alert: The Fake "Guru"

Property Updates News
#1

Dear friends, here is an interesting and an important news article from yesterday’s DAWN newspaper which I felt is a must read.

Http://www.Dawn.Com/news/1197441/stock-gurus-using-social-media-to-rob-investors

The article is written from the perspective of stock markets but I think it applies equally to property also, because of two reasons. One, because more investors in Pakistan invest in property than in stocks. Second, because online forums such as Zameen, LRE and various other social media such as facebook are now being widely used for seeking guidance on property investments also.

For those who might not understand the technical terms, here is a summary:

  1. Various people with an evil intention are seeking to establish themselves on social media & online forums as “Investment Gurus” with the specific objective of robbing innocent investors.

  2. These “Gurus” may either act alone or work in teams, with other members of the team working to establish & reinforce the image of the gang leader as an “Investment Guru”.

  3. The “Guru” in his interactions appears as a dedicated, honest and knowledgeable individual who knows the inside out of investment.

  4. He issues investment advice which is based on common sense and maybe somewhat helpful/beneficial for investors. This helps him to win the blind trust of novice investors who for various reasons are unable to research & determine the authenticity of each and every advice on their own.

  5. After reasonably establishing his image, the Guru starts his criminal activities. He buys an asset at a dirt cheap price, which is not worth much from investment perspective, at least at that time.

  6. Having bought it for cheap himself, he recommends to his followers to buy that asset as it will give great returns. These recommendations are often further supported by narrating glorious stories from the past of having derived huge returns from that asset quoting real or dubious references.

  7. The ordinary investors, not suspecting the real motive, quietly rush to buy that worthless asset. As a result of the resulting demand, price of that asset actually starts rising. Once it reaches a target level, Guru sells his own assets and makes a killing.

As per the article, this highly unethical international phenomenon has also made its way into Pakistan. SECP is even considering making such actions a “criminal offence” under the law.

So dear friends, whenever scouting for investment advice online, keep your eyes open and beware of the fake gurus. The threat is real and it is very much here.

#2

"After reasonably establishing his image, the Guru starts his criminal activities. He buys an asset at a dirt cheap price, which is not worth much from investment perspective, at least at that time. 6. Having bought it for cheap himself, he recommends to his followers to buy that asset as it will give great returns"

I think no one in their right mind will deliberately buy a bad real-estate property in the hope that he can increase its price by publishing good posts about a bad asset on online forums like Zameen. That will be the recipe for disaster. I cannot think that this tactic can work in real estate. He will himself lose if he does this.

Online forums have almost negligible effect on plot prices.

#3

Ppl who are online and active in discussions knows the approx price of market around. But thanks to Mr. Kashif Sheikh for sharing the article. Still a good help.

Regards

#4

Thanks for the alert Kashif.

I'm sure there are plenty of exposed newbie investors who can easily be lured into a scam. Especially this is more relevant to overseas investors who do not have any ground base of research and usually are used to fair dealings.

#5

@Baloch. I think I need to clarify this point more. When I use the word "worthless", you have to understand that it is a relative term. For example unlike roshan Pakistan where we all may agree, there may be huge disagreement amongst other projects. Just go through the threads on this forum. Whether its Gulberg, topcity, cabinet, multi, enclave etc. For every project there is one set of investors who feel its wothless and there are those who feel it is the best value for money. Now imagine in this gridlock, the "Guru" and his sidekicks decide to support one point of view. It changes the perspective for a lot of people. If online views didn't matter so much, Dr A would not have been the talk amongst multi dealers! (I have personally heard the chatter).

Lastly, the "guru" whenever he makes his recommendation, it has to be based on something to make it appear genuine. This something could be concocted rag-to-riches stories of previous investors including himself or a Strong Rumor of something to come. As we have seen in the past, be it the Rawat airport, Margalla avenue stories, new airport developments, margalla tunnel, etc. Rumurs can shake the market.

#6

Thank you Kashif Sheikh for that informative post. I have actually experienced this myself on another website called hamariweb.com. It was popular among gold investors. Most people there were always asking each other about what to do. Suddenly one person would appear & start posting well written technical analysis. He was followed by a group of cheerleaders who were always there to do “wah wah” on his analysis and would shout down and ridicule anyone who dared to raise any questions. After sometime, people would actually start following them blindly! They worked in almost same way. For those who may not know, local gold prices are not fully determined by international prices. Their is a top-up cover which is determined based on local demand and supply.

#7

These so called property gurus are working on the principle of sheikh chilli,where they ll buy eggs to hatch chicks and so on and so forth,who has got time to be so patient to even ripp people off in months,its better to grab a gun and start looting people in a matter of second,and stand tall morally as well,at least you are not backstabbing any one,

#8

Completely agree with you Adnan. The so called Gurus posting well prepared lengthy write-ups based on suitably distorted logics and melodramatic theories to hoodwink people are the Fakes we need to remain beware of. Don’t suspect anyone, but do watchout for the telltale signs.

#9

Well! Well! Look who came in first squealing No! No! This can't happen, We are not doing this, please, this can't happen....Why am I not surprised? After all, chor ke darhi main tinka!

I am SO waiting for Falcon to see this thread. Game's up for napaki and his po*p-sicles :D

#10

Here is an excerpt from the referenced article:

"The official assured that several measures are under consideration to curb the unfair practice, including bringing it within the realm of ‘criminal offence’. "

It was quite interesting then to read comments from zameen admin (real one) on another thread. For them people using this forum for cheat marketing is not an issue. On the contrary they seem more interested in protecting those representing Their corporate sponsors operating on this forum, from getting exposed or cornered.

So no surprise that these Fakes are always looking to the admin for achieving their corporate goals. When they run out of concrete arguments, they start squealing like a rat caught in a mouse trap:

"This thread is created with a mischevious intention.

Zameen management should treat this is as slanderous and libelous. They need to close it to prevent damage to people's hard earned investments in a perfectly beautiful scheme - .......

Zameen management requested to close it down."

Reference: http://www.zameen.com/forum/discussions/buying_property/b_17_mpchs_fall_in_2015-9913-24.html

Interesting that they acknowledge that posts on this forum CAN have an effect on prices! If it weren't the case then why would their organization be spending so much out of their "strong balance sheet" over here. Who are they trying to fool then?!

#11

The purpose of sharing this news report is to create awareness, not to name and shame anyone in particular. Off course prices can move in property also, provided the "Guru" is able to stimulate a strong enough interest. After all how does MR lift prices in Bahria?

At any time, in a block with a 1000 plots total number of plots in the market are no more than 50-60. If suddenly buyers start entering the market to pick up 15-20 of the best available plots, it signals to the market that buyers have returned. People start raising asking prices. The rising prices gets the attention of investors waiting on the sidelines, who also jump in to join the bonanza. This increases demand even more driving up prices even further, until the balloon bursts with too much air.

This process can be triggered by a single individual buying large number of plots, or 15-20 people, motivated by a "Fake" guru, buying one plot each. The good thing about these open forums is that if someone is trying to misrepresent facts and oversell "his" interest, there are always people who will challenge the "Guru". The only advice is to keep your mind open. If something sounds too good to be true, then it probably is that way. If a project seems like out of fantasy, its probably going to be a nightmare.

#12

Agree sheikh sb we need more falcons to stop the ways of hypocratic fake story makers.

#14

@Full Name & Nasir 05. Worry not bros, Falcon is always on the prowl, just maintaining low profile for a specific purpose. Falcon radar is picking up signals which indicate that this shadowy character has not yet exited this forum. He is still here, and falcon will unmask him. I thought he would show some self-respect by standing by his word, my mistake.

Regarding this post, actually after reading it, I feel sorry for paki-1. Being a fake guru may not be an offence yet, but violation of intellectual property rights is. This news reporter stole paki-1s personal notebook of dirty tricks, copied all the points, converted it into a news article and published it as an article with his own name without giving any credit to the original mastermind. This is despicable behavior. Afterall, Koi sharam hoti hai, koi haya hoti hai!

#16

Entry pending... In other words..

You guys are way to serious!!!

#17

One of my nicely worded message is also being held up…but on a positive note it means that admin has finally included the word “paki” in their filter of objectionable words. Good job!

#18

@ Falcon

This character is again coming out from " cabinet" with fake ID support team. Can u believe they send me one page lenghy abusing words. May be sent same to others as well.

#19

@Nasir05, paste the abusive mail here for others to understand things.

#20

@Nasir05. I would appreciate if you don't post any such things here and prove yourself to be the better person. This forum needs a little break to get back to normal.

On another note, I am feeling that this post might have had some unforeseen outcomes. It was meant to merely enlighten members about an evolving new form of online scam after the infamous emails from Nigeria and lottery scam from spain. However, it seems that some of our genuine experts have become overly cautious which is entirely unnecessary!

#21

Forum gurus must join and share their views on this tread

#22

Allah maaf karny walon ko pasand kerta hai!! if u ask and want forgivness from Allah on judgement day, than start forgiving His people in dunya.

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