What you need to know before investing in HYIPs

It’s no secret that the price of a stock is often not determined by its fundamentals. It is formed by the level of speculative speculation, caused by rumors, information in mass media, fashionable trends, etc. It does not matter whether the public attention is justified or not. Heightened interest always has an impact on the share price.

Some resort to such a controversial strategy and invest in stocks around which such a hype is raised. However, the hype will eventually die down and this will “land” the stock and bring it back to a more realistic valuation. As an example, Virgin Galactic, which lost about 60% after Branson flew into space. This led to financial losses for many investors.
Buying such high profile stocks is akin to playing musical chairs. The main thing is to sell them on time.

Such a strategy is far from a real investment strategy; it usually has questionable performance and is more akin to speculative trading.

In the cybersecurity segment, one such hype bubble burst today. Crowdstrike is trading for 64 future earnings, yet so far each such dollar is making it a loss of 15 cents.

Paying attention to such fake news, which the information field is full of, investors miss actually important information, which will influence the market in future. For example the news about the promise that Microsoft and Google made to Joe Biden is not very visible. They plan to invest a whopping $30 billion in cybersecurity over the next 5 years. The hottest companies in this field are Crowdstrike, Okta, Cloudflare and Zscaler. And the amount promised is 10 times the size of their combined revenues, and 40 times the investment they are making in development and research.

With this in mind, investors should consider investing in Microsoft and Google shares, shifting their focus away from cibersecurity hype, as they have a realistic chance of leading the sector.