I am copying that investor. What could go wrong?

I had written this as a Twitter thread long ago. So I am reposting the same in article format here.

Just because a famous Twitter investor or celebrity investor says that the company is good and then discloses that he has invested in the company doesn't mean you should invest too.

Reasons as follow:

1. You don't know how much money he/she has allocated to that company's stock. You might have invested 25% of your portfolio in that company, whereas there is a possibility he/she just has invested only 5%.

2. Even if that investor says that he/she holds only 8-10 stocks. That doesn't mean that person has equally allocated money to all companies. Some companies might have low allocation.

3. You don't know what was that investor's average buying price of a stock and how much dividends he/she has already received. Even if that person sells stock tomorrow, he/she might be in profit.

4. You don't know that investor's other source of income OR investor's allocation into other asset class (gold/debt/real estate). That investor can afford to lose some money, you can't.

5. What if that investor's thesis is flawed?

6. What if he/she gives a late update about exiting stock?

So, make sure that you invest only after considering your risk appetite as well as your own research.