Is really possible that spelling errors can cost investors millions? Here is the full story.
You entered the stock market but still make mistakes. This time spelling errors. Okay, you are not the only one. Spelling errors cost investors millions every year. re you happy now? Of course not.
As we said billion times when you enter the stock market you have to be very aware of which company you want to invest in. What Traders-Paradise wanted was to present you with a wonderful world of investment. And you can find a lot of articles that we offered numerous examples, from how to choose the broker to how to calculate your profit. A lot of times we tried to teach you how to check the company in the market. And how important their ticker symbols are.
What we saw is that you invested in FORD!
WOW, good choice indeed. But did you really want to invest in “Forward Industries” or “Ford motor”?
Under this ticker symbol, FORD is “Forward Industries” not the car company. What, you already invested there? You should be more careful. Ford motor is under the ticker (F), just F.
Take care of it because Ford Motor will publish its Q3 earnings on October 24th.
Why investors are losing millions every year?
If you did invest in FORD, the only problem is that you invested in a manufacturer of “carrying cases for medical monitoring systems” worth $10 million, so don’t expect too much from them. Experts calculated that this error costs investors about one million in trading only for the fees.
Where is the lower or lost return? Can you calculate that?
A lot of those investors usually don’t even correct this mistake until it is too late. They still think they made a good investment until they see in the quarter or annual reports. Some of them notice the error several days after and try to sell their stocks, but is the game with poor results. Actually, it is very rare they can bring the invested money back.
So, let’s see again where you can make similar errors?
For example HP. Do you really think it is a giant company, Hewlett Packard? Nope! It is the ticker symbol for Helmerich & Payne. You are free to check their official website:
“H&P is the leading U.S. unconventional driller, and our drilling experience spans the globe. Our company currently owns and operates land rigs across North America, South America, the Middle East, and Africa, with offshore rigs in the Gulf of Mexico.”
Do you still want to invest there instead of Hewlett Packard, it trades under (HPQ)?
Also, Hewlett Packard Enterprises, you will find under (HPE).
Would you like to invest in ZOOM? Yes? That is another mistake. It is an unclear Chinese wireless business. We suppose you wanted to invest in ZM which is $25 billion worth video conferencing platform.
Spelling errors cost investors millions
For example, you want to invest in Twitter. What is their market ticker symbol? TWTR or TWTRQ? Don’t invest in TWTRQ, it bankrupted. Yes, several years ago, in only one year, during 2013, it’s stock rose1000%. What a market star! But a shooting star. There is no more this home entertainment retailer.
But TWTR is still there ready for you to invest in.
There are more.
Two professors at the Rutgers School of Business-Camden discovered that over half of listed US companies deal with a “meaningful part” of their tickers with a different company.
It can be in a different industry and, also, with huge differences in market capitalization. Those professors found almost 250 so-called, company pairs that can lead you to wrong decisions. Professors claimed, “250 company pairs where the possibility of confusion is particularly high.”
For example R1 RCM (RCM) vs RCM Technologies (RCMT) where market cap difference is 3,215%
The problem appeared due to a phenomenon known as “fat finger trades.”
So, take care, avoid spelling errors that cost you a lot of your hard-earned money.
Also, the robo advisor can make mistakes. Yes, of course. The inputs are given by the people and the people make mistakes. The algorithm will follow inputs without the question. You can be sure.
What we want from you is to “spellcheck” your investments. Proofread the tickers from your preferable company and make corrections on time.