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And there have been more bizarre decisions taken by such bodies that further harm the individual investor's interest. 
Have Individual Investors become Guinea Pigs?

Hi there! Have you ever wondered why the gadgets you often have an eye on trend to get costlier and costlier? Why does it happen that the car or product you plan to buy next goes on a “price surge.”

What! Wait, is somebody mining my data?

Most certainly, yes. Companies are calibrating prices based on the demand matrix. Disappointing, isn’t it?

You may even feel like changing your choices or dropping the idea of searching about it on the internet. But, how would you know what to buy then? It seems like a close nexus we are trapped in, and there is no escape.

Yeah, except for being treated like “Guinea Pigs.”

To understand this term, let us take an example. An example we are all aware of. The uber and airlines price surge. Beyond anyone’s logic and comprehension.

But I will tell you; it is much like being charged higher for a coffee on a cold day or higher for wine on Saturday evening.

Shocking, is it? I know, but the way they are tracking our data is even more minute and huge.


To get an answer, look at how these big firms develop the products or fuse with institutionalized retailers. We all love Alexa. But how horrific it may sound to know – whatever we speak or ask may get recorded and transmitted back for data analysis. [1]

I know, a word that looks professional and has a business tone attached to it. But, it may be devastating to see how our data is getting siphoned off like oil.

Silicon Valley’s Data Gamble

A data gamble by Silicon valley. It must be huge!

Indeed it is!

This data gamble is not only about Amazon or Uber’s advanced tactics to track users’ data for maximized profit. It is about negligence. It is about sheer carelessness, of a kind you would laugh out at.

So, what kind of password do you usually have for your Gmail? You may wonder what this question is, “Of course, a sensical being would keep it at least a five different set combination of numbers, alphabets, hashtags, and Caps.”

Yes, as expected.

Now, what if I told you that somebody kept “12345” as a password for a 57 million user data file.

Disastrous and unbelievable. Isn’t it?

Well! It has happened at a place none other than “Silicon Valley.” Due to the negligence of their employees in setting up terrible passwords, more than 57 million user data was laid vulnerable to manipulation of various kinds. [2]

It is shocking how a big name didn’t have something as basic as standard password protection rules. It suggests how little they are concerned about our data in the first place!

Whatever it is, the limited question we must answer today is of individual investors’ interest.

How does this impact individual investors?

First, let us know who are individual investors. Individual investors are the ones who usually invest for long-term growth and contribute to the capital market. They often trade in smaller amounts and purchase for self-consumption. [3]

They are the ones who spend their hard-earned money on something they feel can provide lifelong benefits. Therefore, they must make informed choices. A sneak peek into what they think, how they think, and what their insecurities are; makes them vulnerable to manipulation.

Undoubtedly, affecting their choices and interests in the long run.

You may wonder why only “Individual Investors” are targeted?

A valid question; let me try to answer that.


They pander profit usually by manipulating the decisions of individual retailers.

Oh, brutal that is!

How can it be not? I mean, look at the process!

Big Firms – Fusion game

Look at how big companies like Amazon are acquiring Whole Foods, a company that has relentlessly destroyed individual investors. [4]

The fusion of these companies with reputed firms end up normalizing the trend of destroying individual investors, the guinea pig way.

Well! There is more to the story.

For haven’t you wondered why is it so easy for these firms to play with the rights of individual investors despite the regulation in place?

So, let us know the big reason.

The difference between institutionalized and individual investors

Institutionalized investors likely have a board having experts from all fields. It equips them with the ability to make better decisions. Because of their size, they often succeed in commanding lower fees from the bank. Ends up getting all sorts of preferences.

Yes, all of that makes sense. Where does the problem begin?

Problems begin to surface when these institutionalized investors, already at an advantage, start sidelining individual investors through cheap tactics.

These investors usually leverage their influence through proxy voting and get to easily initiate a dialogue with firms.

Oh, this makes me feel helpless! It seems like there is not enough info and resources for small investors to leverage.

Isn’t there any rescue?

What about those “Risk Models”

That is a true savior only if you convince yourself it is reliable.

Are “Risk Models” reliable?

Let us understand what these “Risk Models” heavily rely upon. They are no doubt documented by some of the finest minds. But, they are based on historical data. The reliability of these data can be gauged from the Swiss currency shock and Brexit.

Not only do these models fail, but they also unmasked the practicality aspect. The economic trends mostly depend on factors ranging from inflation to demography. And factors like these keep on varying. Therefore, a thorough study in these areas isn’t available to the general public.

It explains why individual investors are often less informed to make their decisions. They cannot risk millions in market analysis after all. That is why you will see they are easily misinformed and lured into a loss.

That is such a disappointment!

Where do these investors go, then?

Wouldn’t the stock market be a better place?

Yeah, why not! Only if you sustain an unprecedented “Bear crash.”


If you have invested in the stock market or have been closely following the same, you must have come across investors who are lured into investing in almost bankrupt industries.

Isn’t that stupid? What makes them do so?

Imagine you had spent Rs X in stock. Now, you see the market crashing and wish to withdraw your money, even at a loss. But, no sooner do you make the withdrawal plan than you see news circulating in your social media groups that Reliance is about to place a bid on the stock.

Woah! You get an adrenaline rush, almost anticipating a huge return.

So, instead of withdrawing the money, you are tempted to spending more. And oh, you end up getting subjected to a huge crash.

That isn’t even a built-up story. Companies are doing that. Read the stories of these stock market scams, and you will know [5]

It is not the end.

Know how operators trick retail investors

Operators are the ones who hold a large sum of shares of a company. Now, as soon as they see stocks crashing, they immediately increase stock prices by placing small buy orders at higher prices.

You would often see an immediate social media buzz circulating this.

It makes small investors greedy to invest, only to face a huge setback once they see the buzz receding.

What can these investors do then?

Hmmm, a valid question.

But, most of it would also require efforts from the Government.


Well! What can they not? The key also lies in policies. I mean, look at Yes Bank. They lost 100% of their real money. The reason behind such a huge loss?

Irresponsible lending to companies who were unable to borrow elsewhere. Seems irresponsible?

I know. But who was at the brunt of it? Individual investors who spent their money in funds or brokerages.

Here we were already shocked to see this gruesome plight. And there, RBI turned a little more audacious. Extending a 50,000-crore credit line to raise more money from the public. It was bizarre, to be honest. [6]

And there have been more bizarre decisions taken by such bodies that further harm the individual investor’s interest.

Even after the bankruptcy code, haircuts and debt go as high as 60 to 90 percent. [7]

Therefore, clear regulations to protect the retail investor’s interest are very important. But have these regulations been brought in place? Whether it requires registration of intermediaries or access to more secure markets, the Government is well equipped to decide.

But, when will it be well equipped to fix?


It depends on how you use this as a learning. However, something I am sure of – There is no shortcut to success in this field.

The interplay between greed and misinformation can further make it worse.

Let us understand that there is no substitute for Research and Analysis of investment risks. Beware of the risks!

Or, in short, “Invest only what you can afford to lose.”