Thursday, August 11, 2005

Stock Manipulation A Thing of the Past?

If you think so, just check NGPS, its 2 day tape, and all the message boards on the internet. You will see a concerted effort to slam a stock by people short it, cover, buy it, pump it, then dump it. I for my part am out with no damage done other than an education that this world exists outside the penny stocks.

A possible investment strategy that I am researching now is to find people involved, follow them and play the other way when I feel there is a compelling situation, provided I can do so in securities $10 and above. I will paper trade this for a while to see how it works before risking any hard-earned.

A recent good beach read for me was "Scam dogs and mo-mo mamas". Check it out if you are a serious investor and haven't read it. It covers the whole pump and dump thing from the pumper and dumper's point of view. Very informative read and it will definitely make you a better trader, just from the knowledge of what this particular group of people does. Warning: I do not read message boards and don't follow these so called "gurus". I personally find I trade better when I am making entries and exits with my own brain rather than being influenced by those knuckleheads. My contact with this crew is generally accidental. But I do admit to sometimes throwing the victim stocks on my watch list to watch the carnage, just as I sometimes find my head involuntarily turning to inspect the roadkill as I drive past.

If you really would like an informative site, check out this blog, titled "Alchemy of Trading".


This is the blog of the thoughts of a pro money manager. I read it daily.


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