We Have A Failure To Communicate
posted on
Mar 25, 2008 06:58AM
The company whose shareholders were better than its management
Joltin,
I posted a while back a list of trader stratagies that can be used to influence the direction of a stock price. Most of them I said I have no problem with, afterall, if you are going to play a game, which investing in the markets is to a large extent, then you should know the rules. Like in any game, if you do not know the rules, then you are going to lose very quickly. Most investors in the markets do not know the rules, do not want to believe how shady they really are and that is why 95% of them lose their money when they invest in the markets.
Now, these strategies have a purpose, it is to manipulate less experienced investors, the retail investor. Whether you want to call it good trading or manipulation that is just semantics. Anytime you make a trade thats purpose had nothing to do with the fact that you thought the stock was undervalued or overvalued. Instead was intended influence the price direction of a stock ( suckering someone into selling or buying) then that is manipulation.
This is against the law, however since it is practically impossible to prove, one must accept it as fact and the way markets actually work.
What I take exception to and have stated it before is the planting of false or very misleading information in the public news media and the trading of shares to oneself.
Now, it is virtually impossible to prove that articles in the media were planted to influence people in a certain direction because the writers just say it was IMHO. While this is a dirty trick, it is nothing I worry about because I do my own extensive DD and I know not to trust anything in the media no matter what form it comes in.
Now the trading of shares to one self is another dirty trick and would be easily provable by tracing who the accounts are ultimately controled by. I control numerous different accounts and could easily trade shares between them and do what these manipulators do myself, but I do not. While all the traders tricks that I listed by definition my be called manipulation, yet I consider most of them acceptable. This is because if you practice them and try to bluff, you still run the risk of someone calling your bluff. Whereupon depending on how large you were bluffing, you will suffer the financial consequences of it.
How well you do when playing this game then depends on your skill level. The greater your skill level and knowledge the better you will do. I for one believe that ones skill and knowledge or lack there of in any field should be rewarded or punished accordingly.
I learned a long, long time ago that in any game their are those who will cheat. Selling shares to one self is just that. You are able to influence the share price direction while not taking the finacial risks of losing shares or of buying overpriced one that goes along with it.
This is totally unexceptable to me and thus I am nothing like the manipulators that I describe and knowone has the right to make money this way.
There are people on this board that think the manipulation is a bad thing. Well in the short term it is, but for those who think in the longer term as I do it is great. This is because, the fact is that some entity or entities would not go through all this trouble and take the risk they do unless ARU were not highly valuable. Thus it is just confirmation of my own knowledge.
Joltin, it has been obvious to me for a long time that your idea's of what is considered acceptable trading practices is much broader than mine. This is no surprise to me coming from someone who has spent 25 years in the pits as you claim. However, you get very few thumbs up with your claims of no manipulation because many of on this board have the knowledge and experience to know how the game really works. We recognized it in operation and no doubt there are a fair number of posters on this board who even practice it to some degree.
Regards,
F.F.