Sunday thoughts on manipulation and about being a true contrarian

Time again for some Sunday musing on those things that daze and amaze, on the games that astound and confound retail investors trying to make sense of the capital markets.  

Manipulation, everyone loves to scream manipulation.  

You see people posting about it all the time on stock message boards and other social media sites devoted to the discussion of the equity markets.  Are the markets manipulated?  In my opinion its a dumb question, of course they are.  

What's interesting is that you never see people posting messages complaining about manipulation when a stock's value is going up.  No, to most people manipulation only comes into play when they think its being employed to work a stock down.  Well, here's a news flash...it works both ways.

There are market forces at work way beyond the scope of retail investors.  Hedge funds with billions of dollars in capital that play both sides, long and short.  And Hedgies have another advantage over Mutual Funds, and that is margin or leverage.  Hedge Funds can and will use leverage, as much as 100%, to increase their fire power.  

When you consider all the tools available to influence the buying and selling decisions of retail investors its pretty easy to understand why the bleacher crowd ends up on the wrong side so often. Going long when the smart play is to go short, and short when the smart money players with their giant tool box go long.

Television, print media, analyst ratings and recommendations, investor news letters, promotional interviews and stock promoters with podcasts and YouTube videos, email blasting chop shops.  

I've posted this old webcast interview of Jim Cramer before, but its something that's worth repeating. 

Cramer basically says that fundamentals are meaningless, and I happen to agree.  When you have Hedge Fund players with hundreds of millions of dollars at their disposal they can create whatever reality they want, and I would argue that the more speculative the company the easier it is to do.

So what is a small little retail investor to do?  Incidentally, I don't care how much money a retail player has to work with, even if its one million or even ten million, we're all small fish swimming in shark infested waters.  Some of us may be little tiny guppies, while others may be big fat tuna fish. But we're all luncheon meat when there are killer whales in the water.

There's only one thing to do in my opinion, and that is to be a contrarian.    

But what is a contrarian anyway?  It seems that everyone these days is a contrarian, or at least they claim to be.  If everyone is a contrarian then the real contrarians would have to be conformists wouldn't they?  So let's define what a true contrarian is.

Basically a contrarian tries to run in the opposite direction of the retail herd.  When all the sheep are bullish and buying the contrarian either stays away and goes short.  When the great unwashed are being told to stay away, that an investment is no good, then the true contrarian looks to go long.

BUT WAIT A MINUTE, NOTHING IS THAT SIMPLE.

When looking to go long it would be disaster to simply throw money indiscriminately at every distressed stock one comes across.  Companies do go bankrupt and stocks do get delisted.  

From where I sit its a question of extremes, and in my view charting or technical analysis is absolutely essential.  I myself will not buy any stock without first consulting the chart.  

So what do I mean when I say its a question of extremes?  That's where charting comes in.  If a company releases negative news, if there are posters to social media sites preaching doom and gloom and doing all they can to counter any bullish argument, then a true contrarian might have something worth risking some money on.  The biggest qualifier is the chart, specifically the price volume movements.  If the retail herd is being told to stay away, but the chart shows evidence of support, that's a time when I will start to do more research.

Sometimes a stock is falling, and yet there is bullish news out and pumpers all over social media imploring investors to "get in on the cheap shares".  I would be careful in that case, while the retail herd is being encouraged to buy, there are obviously others unloading the shares the sheep are getting.  

A contrarian looks for support when the players are being encouraged to sell, or for weakness when the herd is being told to buy.

I don't discriminate between penny stocks and those listed on more senior exchanges, its all the same game as far as I'm concerned.  And stocks don't turn from a buy to a sell in the blink of an eye.  I have a habit of getting out too soon when I see market forces ringing the dinner bell, but that's okay....when I leave money on the table I simply cry into the money I made.

Good luck and happy Sunday everyone

The importance of staying within your tolerance for risk.....

Investors could lose some or all of their investment.

How often have you gone onto a website promoting an investment vehicle and found a disclaiming statement like the one above?  If the answer is never, then you're probably not looking very hard, its pretty much standard boiler plate.  You see this type of disclaimer all the time on promotional sites for companies in the development stage, selling shares to finance business operations while they attempt to achieve sufficient revenue to fund the business.  Of course its usually in a small font, and often requires hitting an embedded link to find it.  

Risk tolerance is of vital importance when investing.

How often have you looked at a stock that's gone from 10 cents to $1.00 and thought:  "If I'd put $10,000 into that stock at a dime I'd have $100,000 now".  But how many people have $10,000 lying around that they can afford to lose?  Would losing $10,000 put you in danger of missing a mortgage or rent payment?  Would the family vacation have to be canceled?  

These are important questions to ask.  

More than anything else psychology rules the market from where I sit.  And when people put money at risk that they can't afford to lose, the results can be disastrous.  If you have say $1,000 that you don't need, that is to say that its money you could lose and not have it impact your life in any way, shape or form, that is what I call "risk capital".  Putting that money in play in a high risk, high reward penny stock, it could very well lead to some very nice gains.

$500 invested in a 10 cent penny stock that goes to $1.00 and is then sold will result in a gain of $4,500....a 900% return.  Turning $500 into $5,000 is nothing to sneeze at.  If someone walked up and handed you fifty $100 bills....Would you tell them to get lost?  I don't think so.

The problem is $5,000 in today's day and age....its not a lot of money.  And that's where people get into trouble, especially with speculative stocks.  And its not just OTC penny stocks either, it can happen with companies with shares listed on more senior exchanges as well.  There are plenty of Nasdaq and TSX listed stocks that have been around for ten or twenty years....and more, that have never achieved positive cash flow from business operations.  That's why they hire stock promoters to attract investors.  

Staying within your tolerance for risk, only investing money that you don't need, I would argue that it will lead to making better and less emotionally driven decisions.  

Let's say you have $1,000 in risk capital, we'll call it "mad money" and you decide to invest it in a 10 cent stock. If that stock goes to 20 cents...then you've turned it into $2,000 if you sell.  Maybe after you sell the stock will continue to climb to $1.00.  Oh well, too bad so sad....cry into the $1,000 you made in profits.  

But if you'd invested $10,000 and it was money that was needed for the mortgage, rent, vacation, or any other planned or required expense.  Now if you sell at 20 cents you've turned $10,000 into $20,000....But if the stock keeps climbing are you going to be able to leave it alone, or are you going to believe the forecasters touting a $2.00 price target and put it back at risk by buying back in.

Greed is a powerful emotion, perhaps even more powerful than fear.  Many people can control or stifle their fear, but are incapable of harnessing their greed.  Remember the movie "Wall Street" and the 'Greed is Good' speech?

Its the same old mantra I keep repeating over and over on this blog.  Nobody ever went broke by taking profits.  Remember that disclaimer right at the top.  If you're dealing with any stock, but especially with a speculative development stage company that has never achieved profits, then my advice is to be very careful and that any profit is good profit.  And if you're holding a stock that's moved up, but you haven't sold it...then your profit is $0.00 nada, nothing.  Just as a loss doesn't become real until you sell, the same holds true with profits.

Good luck and I hope this blog is helping retail investors make $$$.  



When is averaging down a good idea?

To my faithful horde of followers, yes  all three of you, I have neglected this blog of late while watching my beloved Blue Jays advance in the playoffs.  Alas now that they've been eliminated by a better (and I must say classier) team in the Cleveland Indians, I will once again get back to sharing my thoughts and ideas on a more regular basis.  

One last note on baseball, I am still a big fan of the Blue Jays, but my regard for one Jose Bautista has fallen considerably.  His remark about the young Cleveland starter Merritt, who pitched 4+ brilliant innings to start game 5....Bautista's comment was totally lacking in class.  Jose said the young lefty would be shaking in his boots at the prospect of facing Toronto's vaunted line up. Cleveland took the high road after taking the ALCS, they didn't rejoice in making Joey Bats eat his words, instead they wisely said they don't pay attention to that kind of stuff.  

That's what winners do, they let their actions do the talking and its why I'll be rooting for the Tribe.

But now onto the topic at hand, about averaging down and whether or not its a good idea.  As with so many things in life, it depends.  For anyone who might be unfamiliar with the concept of averaging down, sometimes called "dollar cost averaging", its really pretty simple.  Say you buy 1,000 shares of a stock trading for $15, costing you $15,000 total.  That same stock then falls all the way to $10. So you invest another $15,000 at $10, but now you buy 1,500 shares.  Now you own 2,500 total shares and your average cost is $12.50....if the stock makes it back to that $15 price you first bought in at, then you're making money...at least on paper.  

The devil though, as often happens, is in the details.

If you're going to average down on a stock I would suggest you better be very confident in the prospects for the PPS to recover.  Is it a profitable company?  Are you receiving dividends?  That's not to say that averaging down a speculative investment isn't a good idea, its something I've done successfully in the past myself, but it is something that requires staying on top of things in my opinion.

Firstly, did you buy the stock at a time of heightened excitement, with lots of news and heavier than usual volumes trading?  If that is the case, then averaging down might not be a good idea.  If a stock is falling in spite of bullish news and increased trading volume, it could be an indication that while the retail herd may be excited and buying, that there are other players who are obviously selling the shares being bought.  And those sellers might just have a better gauge on the future direction than the retail herd.

From where I sit there is no "one size fits all" solution to determine when averaging down makes sense, no ABC checklist to follow.  But as a general rule I do think its best to try and gauge how the market is affecting the psychology of retail players.  I am a contrarian at heart, and that means running in the opposite direction away from the retail herd.  If volumes are high and the news seems good, but the PPS of a stock is heading south, then I will ignore the advice of those who advocate averaging down.  

Now, to bring this back to baseball and tie it in.  I am a fan of the game of baseball, I loved playing the game and I love watching it.  But I'm mostly a fan of the Blue Jays, its the team I grew up with.  I know the players and their histories, with other teams not nearly as much.  But while I'm a big Jays fan I'm not blind to the negatives, like that crack Bautista made about Merritt, the young Cleveland pitcher.  

Some people will fall in love with a company and its stock, and anyone who disagrees is an enemy. The same as with sports teams. But keeping perspective will allow you to keep a discerning eye when a company you love does something that perhaps you shouldn't like.  Maybe its paying to get noticed by hiring stock promoters, or maybe its putting out fluffy PRs which are filled with hyperbole and future looking promise but nothing of material importance in the here and now.

Enjoy the World Series folks, and whether its Cleveland or Chicago it will be nice to see a futility streak end.  

ATB's take on the U.S. Presidential Debate

If my legion of loyal fans (enough to fill all the seats around a table at a local coffee shop, with maybe one or two empty chairs) are curious as to my take on Donald versus Hillary...I won't make you wait.  I think Donald Trump won on points.

If you're curious about Joe Retail's politics, well here they are.  I'm a Canadian (as most already know) and I define myself as centre left (in Canada we spell center, centre).  I consider myself a fiscal conservative but socially progressive.  In my home and native land I have voted both left and right, I am not partisan nor am I dogmatic.

So why do I think Trump won?  

Simple, I think there are an awful lot of Americans (and the same is true up here in The North) who have watched their standard of living decline over the past few decades, and I believe Donald Trump spoke to that constituency better than Hillary Clinton.  Early on when Donald rattled off the names of swing states like Ohio, Indiana and Pennsylvania...blue collar and hard working, and spoke about the jobs they've seen heading to countries like Mexico and China, I think he scored big.

Hillary did land some nice blows on Donald however, especially on the issue of taxes and the fact that he pays very little or nothing. ''Because I'm smart'' was his retort.  But I do think a lot of Americans see crumbling infrastructure, underfunded schools and veterans not getting the support they need and other areas of under funding, and they have to wonder why a guy who is so rich isn't chipping in his fair share like hard working wage earners are.

But overall and in the final analysis I think Trump's message and branding of Hillary Clinton as a ''hack'', and the architect of so many of the United State's problems...I think it was effective.  It wasn't a knockout, that rarely happens in debates.  Those who supported Hillary before the debate, I doubt he brought many (or any) to his side.  But likewise I don't think those who supported Donald before the debate were swayed to switch camps either.

Now to bring this back to the markets....I do think Trump is right about the overall markets and interest rates.  I do think the Fed has to move very cautiously on rate increases because raising the cost of borrowing too much or too fast could have a disastrous impact on both the equity markets and the overall economy as a whole.

November is going to be interesting, but ultimately I expect Clinton to win.  Donald Trump is an outsider and just as the DNC rigged their nomination to ensure a Clinton candidacy I think the same will happen in November to ensure she is occupying the White House when Barack Obama leaves.  I forget who said it but the line goes something like this....its not who casts the votes that matters, but who counts them.

Peace out.

Story stocks and the Emperor's new clothes....

If you'e unfamiliar with the fable "The Emperor's New Clothes" its an old tale about an Emperor who engages a couple of new tailors who promise to outfit him in the most exquisite outfit imaginable. 

They tell the monarch that the fabrics they are using will be totally invisible to those who are not fit to be in their positions, that or totally stupid.  Of course there is no fabric, but when they pantomime dressing the Emperor in his new outfit he praises the skill of the tailors and the beauty of the rainment because he doesn't want anyone to think he is unfit for the position of Emperor.  Likewise his ministers, advisers and other members of the court, they too praise the outfit, falling over each other to describe how incredible it is.  

Word spreads throughut the kingdom that anyone unable to see the Emperor's wonderful new clothes, that they will be judged unfit for the position they hold.  And so the King leaves the palace and marches among his people with everyone applauding and cheering, until a young boy proclaims that the Emperor is naked.

Sometimes I feel like that young boy.

With public companies there are those that are clothed wonderfully with profits and dividends that get distributed to shareholders.  Others are not so well attired, but they perhaps have robust revenues and its just that expenses are greater than what is coming in.  Bring expenses down or increase revenues sufficiently and they too will get an upgrade in their wardrobes.  

And some companies have nothing.  Little or no revenue and zero profits, only losses.  All they have on are the rags of an accumulated deficit.  But they have a story, a wonderful story.  It might be a miracle drug that's going to cure cancer or some other disease, or a potential mine that will overflow with precious metals, or a new technology or application which will revolutionize the world or at least an industry, a new clothing line, an incredible new beverage....the list is almost endless.

And some will succeed.  Some will develop that drug, or that mine, or that killer application....but many more will fail.  

In my opinion the fable about the Emperor's New Clothes comes into play when there's an abundance of:  Promotion, News and Hype.  When too much effort is employed to make shareholders and prospective investors believe that the Emperor is wearing the most exquisite outfit imaginable, its time to be cynical.  If social media pundits attack anyone who doesn't declare the outfit to be the finest they've ever seen, calling them stupid or unfit to be investing in public companies....My advice would be to run.

There are lots of Investor Relations Rumpelstiltskins out there trying to spin worthless straw into gold so be careful and suspicious.  And pull out a book of old children's fables like those by Aesop and Hans Christian Anderson, you might find some lessons that still apply today.

Iceberg orders - Why you can't always trust L-II

You've probably heard of an ancient Chinese book called "The Art of War" written by Sun Tzu in the 5th century.  Although  it was designed to explain military strategy its also very popular as a text for how to succeed in the business world.  

A key principle in the book is about deception, here is what it says:

All warfare is based on deception. Hence, when we are able to attack, we must seem unable; when using our forces, we must appear inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near. 

Many view the public markets as a war, a battle between longs and short...dah bulls versus the bears. I also view it as a David and Goliath struggle pitting small retailers against big industry players. A war between the lunch bucket crowd logged into discount brokerage accounts on one side, pitted against an army of market professionals.  And unlike the Biblical account where David slays the giant, in the market game its the Goliaths that usually win.

And one reason they're able to win in my opinion?  Deception.

When a retail player logs in with their discount broker and places a limit order, either a buy or a sell...BING, it pops up on the order book and can be seen on L-II.  Maybe you've checked it yourself. You decide to place a buy order for my favorite fictional stock, ABC which show 10 lots on the bid at $2.00 and 10 lots on the ask for $2.10.  You put in a bid for 10 lots at $2.05 and...BING...you see your 10 lot order pop up on Level II as the highest bid.  

When a Goliath puts an order in however, he has some other options, one of which is an "iceberg" order.

What is an iceberg order?  With a real iceberg floating in the ocean, you can only see a small potion of the ice, most of it is hidden below the water line.  With an iceberg order a large player can have 10 lots showing at the bid at say $2.00, but another 1,000 lots on the bid at the same price, but hidden from view.  

Why would someone want to hide their interest in buying?  Pretty simple and obvious.  The big player doesn't want everyone knowing that they have major interest in a stock.  After all, if the big buyer thinks $2.00 is a good price for ABC and everyone sees a massive order for 1,000 lots (that's 100,0000 shares) on Level II, then those selling might think...."Damn, maybe something is coming, maybe I should hold on...or maybe even buy some more".  

And the same thing works when selling.  Rather than "advertise" that he wants to dump 100,000 shares after ABC has climbed to $10, instead the iceberg is used on the sell side, with only 10 lots showing and the rest hidden.  

If you pay attention to message boards for a stock that's getting a big run you've probably seen messages like:  "Only 10 lots available at $10, once those get taken out this is gonna fly"!!!  It happens all the time....usually in tandem with some bullish news combined with promotion and lots of hype.  

The game is deceptive, but also necessary I would argue, otherwise there wouldn't be fortunes to be made, and of course it follows.....fortunes to be lost.  Its a zero sum game and not everyone can win, some will get shares while others get cash.  And knowing about the deceptive games is still only half the battle, there are so many traps designed to ensnare the naive and greedy that no retailer no matter how good can win all the time.....just try to win more often than you lose and don't be shy about taking profits in my opinion.  

And that goes double when you're dealing with shares in a company that is losing money currently but promising big things down the road.....all too often the road stretches out forever and is littered with freshly printed shares.

Good luck.

Sunday thoughts - Beware when a stock becomes a religion....

The world is evolving, or perhaps devolving....depending on your point of view.  

I'm finding more and more people insist on viewing things in absolute terms, as being right or wrong, black or white, good or bad.  It doesn't matter if its politics, religion, or even stocks.  Donald Trump or Hillary Clinton, a lot of people insist on seeing one as a saint and the other as the devil.  A particular faith or denomination is either on the side of God or its in league with Satan.  And with publicly traded companies the same dynamic plays out, stocks are either awesome or garbage for some people.

I write a lot about the lessons my late great father taught me from his days working on both Bay and Wall Streets, blending in my own experiences working in the financial services industry. Dad taught me things like: "Don't marry a stock, especially those that are purely speculative".  And "You'll never go broke taking profits".  

My Dad was a great teacher.  But so was my late great mother.

Back in my teenage years I was drawn into a particular faith group.  How?  Uhm, I think her name was Tanya.  It wasn't a total shift from the religious upbringing of my youth, but this was an evangelical bunch  and they knew for certain the path to salvation and eternal life, or so they claimed at least.

My Mother didn't discourage me from attending their worship services or their activities.  Her only advice was to maintain what she called a "healthy bias".  Mom was a smart woman.  If she had forbidden me from participating, or made a big deal of it....Who knows?  I might just be on a street corner somewhere testifying, or maybe on TV using my faith to heal the sick and afflicted.  

I came to hold the view that on some points they were right, others I didn't agree with....and a lot of it, I was in between and unsure.  In my experience that's a healthy view, and I find it takes strength to admit that you don't have all the answers.  Only idiots are convinced they know everything.  

Now to bring this back to stocks.

There are many social media participants who approach investments with the fervour of a religious zealot.  There are posters to various sites who certainly view Ziopharm this way.  That's what I found when I did my first Seeking Alpha blog post on Ziopharm in 2015 expressing the opinion that at $13+ it represented a speculative bubble:  A Speculative Bubble Poised To Collapse?  

When I published that I was roasted by the faithful in the comment section.  I quickly found out what Galileo must have felt like when he dared to publish his theory that the Earth rotated around the Sun, or Scopes for teaching Darwin's theory of evolution.  I was a heretic.  

Why did one opinion cause so much consternation?  

In some cases I think its merely nervous shareholders who lack confidence in their investment, feeling a need to defend their position from any and all perceived attacks.  But in other cases I think the reasons are more insidious, with professional industry players looking to stir up as much buying as possible so sellers can get the best possible prices for the maximum number of shares being dumped.

I've seen the same thing with ABRW lately, anyone who doesn't buy into the forward looking promise is attacked.  

And its not just pumpers who are desperate to convert the great unwashed, so called "bashers" are no better. They're often desperate to convince others that they are stock market experts who never make a mistake when they tell others to dump a stock.

There's one joker on Twitter who plays both sides, alternately pumping with abandon and then bashing like crazy.  Joe Natural with the handle @ChinaStockPro was trashing RLYP repeatedly, posting negative comments with a youtube video of  a tree crashing to the ground: "TIMBERRRRR"!!!

 

JoeNatural‏@ChinaStockPro

$RLYP - oh my, only one word to describe investor faith in this management team's ability to execute

12:51 PM - 27 May 2016

0 retweets0 likes

How did RLYP do?  It's now trading at almost $32 after a buyout deal with Galenica for $1.2 billion in cash.  Back on May 27th it closed at less than $20 when Joe posted his bashing message. Obviously a massively bad call by Mr. Natural, unless of course he was playing that video in reverse.

Now this same false prophet and self proclaimed stock market expert is applying the same energy he used to bash RLYP and channelling it into pumping ABRW. We shall see how that works out.

Bottom line?  Be very wary of those who tell you they're never wrong.  If someone tells you they have the keys to the kingdom and you buy into their hype you might just get to heaven only to find that someone changed the locks.

Why Donald Trump will be the next American President....

Trump versus Clinton, Hillary versus the Donald.  The insider versus the outsider, the chosen one against the bombastic one.  Man oh man, this is gonna be a fun election for my American friends.

And Donald J. Trump is going to win.  

Okay, I hear what all my regular readers are saying, all three of them.  This is a blog about stocks, about the financial markets.  This isn't a political soapbox.  Why am I going on about the U.S. election?  

Well I'll tell ya.  

There's a reason Donald will win, and its the same reason why money losing companies are able to attract investors while printing off shares.  Mr. Trump will be moving into the White House for the very same reasons that people put hard earned money into companies whose executives earn million dollar salaries and bonuses but never deliver long term shareholder value, sometimes for decades.

Why?  Because people are stupid.  

Please note, I said "People" not "Americans".  The United States does not have a monopoly on stupidity.  Canadians like myself need look no further than our largest city, the cosmopolitan and liberal bastion called Toronto, which elected crackhead Rob Ford as mayor.  

Its a simple formula folks, you see it in politics and the public markets all the time.  Just tell people what they want to hear and make sure you have a really simple solution to any problem, no matter how complex.  All you have to do is sound strong and confident, even when you're talking outta your ass.

How it works in the public markets

You have some little beverage company that claims its going to compete with the Cokes, the Pepsi Colas the Nestles of the market.  How?  Easy, by merging with other little companies to bring about economies of scale and synergies, going after a small little niche segment.  Just think about it, some little Pink Sheet traded OTC company will go from pennies to $10 so buy all you can while the PPS has only climbed to a buck or two and you'll be rich.  And don't even think about who is selling, that doesn't matter.

In politics

How can the U.S. deal with illegal immigrants coming in from Mexico?  Simple, just build a wall. Easy peasy lemon squeezey, just say it after me.  Build a wall, build a wall....keep saying it until you understand that it can't fail.  If you're still not convinced pump your hand and chant, and say it louder. BUILD A WALL, BUILD A WALL!!!  

Confidence is key folks.  If you start trying to sound intelligent and nuanced, you've already lost.  

Now, with public companies we all know what happens.  Reality sets in and the PPS crashes leaving investors wondering:  "What the hell just happened"?  But that's okay for the CEO and other insiders because the money has been raised.  The salary and bonus checks will continue thanks to the stupidity of the investing public.  And some are so stupid they'll refuse to admit they even made a mistake. They'll still love the CEO and will blame dark market forces like hedge funds and short sellers. They'll scream at message board "bashers" who were too dumb to buy a ticket to the promised land.

In politics its much the same.  

Once Trump gets elected and the wall still isn't built or even started, it won't be his fault....it won't be because it was a really dumb idea.  It will be because of his opponents who didn't see Donald's genius. When protectionism isolates the United States from the rest of the world and men and women are out of work, it won't be because voters put the wrong guy in the White House, it'll be because of American enemies.  

Oh what might have been

It could have been a different election though.  The Democrats could have gone with a better candidate.  Instead they gift wrapped the nomination and handed it to Hillary Clinton. The former first lady, senator and secretary of state with the private server and bogus sniper fire story.  The contradictory progressive who also says she's a moderate, once against same sex marriage and now in favor of it.  Whiskey Tango Foxtrot???

Bernie Sanders would have offered a clear choice, old but dynamic Bernie knows how to do more than just talk the talk, he walks the walk.  He talks racial justice and marched with MLK.  Hillary talks about the glass ceiling and women's issues but laughs about getting a rapist off with time served. Bernie would have had a chance, but Hillary will inspire too many voters to stay home on election day.  Some voters will hold their noses too long and won't be able to leave the house in November.

In any case it will make for great theater over the coming months.  And for those who are dead set against a Trump presidency, take solace.  This blog made one other recent political prediction, that Britains would vote to stay in the EU, and I got that one wrong.  Maybe I'll be wrong again.

Harsh truth or a tasty lie - Which would you prefer?

Given a choice between lies and the truth, almost everyone will say they want the truth. Reality is quite different however.  To quote Jack Nicholson in the movie ''A Few Good Men'' most people can't handle the truth.  Honesty, they say, is the best policy....but all too often lying is more lucrative.  

Years ago I worked with an African gentleman from the Congo, (back then it was stilled called Zaire, yes I am old) who related to me an old African parable that I will share with you now.

Two brothers, Truth and Lies, had been walking for many days when they came upon a small village. Truth said to his brother:  ''We both know people prefer the truth to lies so let me do the talking''. 

They come upon a woman tending a garden outside of a hut and Truth speaks to her saying:  ''My brother and I have traveled many days without food or rest.  Could we stay here a while and have something to eat and to rest up before we continue our journey''?  

The woman says she can't make a decision, that she'll have to wait for her husband to come home from hunting.  When the husband returns the wife tells him that if he lets these two strangers stay that she will leave him:  ''I  have enough work to do cooking and cleaning for you, I won't do it for these strangers as well".   The husband apologizes to Truth and Lies, but says if his wife leaves him that he'll have nobody to look after him.

They travel on and the next day they come to another village where a big feast is taking place.  Truth is horrified to see that the elderly in this village are hardly being given anything to eat, they are left to pick over the scraps and bones of what is thrown away.  Truth admonishes the villagers for their behavior, saying that the old villagers should be honored and given first choice of the bounty.  The villagers drive Truth and his brothers out of their village.

When they come upon a third village the following day Lies says to his brother:  ''You have done the talking twice now, and we still haven't had rest or food.  Now I will speak for us''!!!

When they get to the third village they learn that the chief is in mourning over the death of his wife. Lies tells the villagers:  ''I am a great shaman, I can bring your chief's wife back to life''.  Lies and his brother Truth are quickly brought before the chief who exhorts Lies to perform his magic and restore the life of his wife.  ''This is a difficult task'', Lies tells the chief, ''It will take all my power and energy and my brother and I are weary and hungry for we have traveled many days now without food or rest''.

The chief sets them up in a comfortable hut and provides them with all the food they can eat.  The following morning the chief sends for Lies and asks him to perform his magic.  Lies tells the chief that he is still too tired and that he will need one more day of rest and nourishment.

The next day Lies asks to be taken to the hut where the chief's wife is lying in state.  He has everyone leave and then starts speaking in strange unknown words, chanting and singing. Finally Lies lets out a loud cry and the chief comes running in, expecting to see that his dead wife has been brought back to life.  

Lies explains to him that as he was performing his magic that the ghost of the chief's father appeared before him.  Recognizing the magic and skill that Lies possessed, the spirit of the chief's fatehr asked Lies to restore his life instead of the chief's wife, saying he would give Lies and his brother one quarter of the village to rule over as a reward.  The chief is mortified, if his father comes back to life then he would no longer be chief and would lose his wealth and power.  He offers Lies the same 25% of the village to restore his dead wife's life instead.

Lies begins as before and again lets out a loud cry.  This time he explains that the chief's grandfather had come to him from the spirit world asking that his life be restored instead, offering fully half of the village in return.  The chief sees where things are going and tells Lies that he can have half the village to rule over with his brother in return for stopping all efforts to restore his wife's life.

The moral is quite obvious.  Most people will take a lie over the truth any day of the week, and lying is often far more profitable.  

Spotting the pumps easier than going long

This blog is not even three months old, and already I have managed to identify some stocks that, in my opinion, were inflated and due to come down.  Taking the PPS from my first write up on the following companies, here is how my bearish calls have performed as of this past Friday's close.

• May 8th  RYU.V   Down -18.9%
• May 5th  ZIOP     Down -27.2%
• May 17th KTOV   Down -54.9%
• June 12th ABRW  Up    +04.0%

My scorecard on bearish calls isn't perfect, but if ABRW does what I expect in the coming weeks and months, then I'll have to give myself an A+.  

As much as I'd like to pat myself on the back for my genius skills at sniffing out inflated stocks, it really wasn't that hard.  The way I see it this was all "low hanging fruit" so to speak.  Three out of those four companies, ZIOP, KTOV and ABRW were all hyped and promoted by an email blasting promotional outfit called StockReversals.  

I followed StockReversals long before I started this blog, and I've seen them pump a number of stocks that have all tanked.  In no particular order I've witnessed them pounding the proverbial table to drum up buyers for SBOT, MOBI, CLDN, LEJU and WBAI over the past 3+ years, touting long term value potential.  

If you want to check the charts on those stocks be my guest.  Those buying in expecting price appreciation over the long haul got creamed.  

RYU.V on the other hand was a stock I saw getting spammed all over a site popular for Canadian listed stocks, stockhouse.ca.  They'd just announced that Gwenyth Paltrow was going to promote their clothing line. I've seen so many celebrity endorsements for penny stock companies over the years, and have yet to see one deliver long term value to shareholders.

So why is identifying inflated stocks so much easier than finding companies with low share prices poised to make gains?

That's pretty easy to explain in my opinion.  Inflated stocks that are poised to drop big, they are SCREAMING for attention.  Why?  Simple....the smart money holders who want to sell need dumb money suckers to come in and pay the inflated price.  

Companies that are trading at or near their lows on the other hand, the good ones in my experience aren't experiencing heavy volume and don't have much in the way of news.  So it can be hit and miss trying to discern which ones might be good candidates.  

I have put out some bullish opinions on a couple that have born fruit though.  I wrote up EGT.V when it was 14 to 15 cents and it got up around 40 and is still trading in and around 28 to 30 cents.  And HMPR was at $1.81 when I expressed my reasons for being bullish and it just closed up over $1.90.

Hampton Road Bankshares is actually a company that I truly believe has the potential to deliver long term shareholder value.  That's not to say it is without risk, but to my eyes the fact that they are turning  a profit gives them a lower risk profile as compared to companies using their shares as capital to stay afloat.

Ultimately I think its every bit as important to know what to avoid as it is to know what to look for. Who wants to pay $6+ for a stock like KTOV only to have half your money wiped out in a matter of weeks.  

I've also mentioned some stocks that have come down, RVX.TO is one that I wrote about when it was trading at $1.34 and this past Friday it closed at $1.23 for a drop of 8.2%.   With RVX though I haven't seen any suspect pumping and table pounding all over social media....if that happens my opinion will change in all likelihood.  And if that does happen it might be reasonable to expect to see the PPS climbing well above even $1.34....only time will tell.  Ideally I'd like to see them succeed with the Phase III clinical trial.  

News Hype and Promotion boys and girls.  In my opinion that is the Unholy Trinity of the stock market that should be avoided.  Beware when something looks too tempting, things are not always as they appear.

Avoid The Bag weighs in on the U.S. Presidential race....

As a Canadian some might say I don't have any real 'skin in the game' when it comes to whom Americans elect as their next president.  That's true, but only to a certain extent.  The U.S. is still the world's largest economy, and is Canada's biggest trading partner.  In fact its often remarked here that when the United States sneezes, Canada catches a cold.

Obviously the next occupant of the White House will have influence beyond the borders of the 50 states, whether its Donald or Hillary.

All I can say at this point to my American friends is...."good luck".  What a choice!!!  To be perfectly honest and frank, I don't know what I'd do if I had to choose between those two.  On the one hand you have Clinton, with views that seem to change with the wind depending on her audience.  First opposed to Gay marriage, now a champion of same sex unions and the LGBT community.  Then there's her Bosnia story about running for cover after debarking from a plane due to sniper fire, while video shows her smiling and accepting flowers from a little girl.

And Trump???  A trust fund rich kid who inherited a fortune, who places a value on his name in the billions but who cheapens it by putting it on failed casinos, vodka and steaks.  A guy who used to support the Clintons who now is running against one of them.  A guy who hasn't met a complicated intricate problem that he doesn't have a glib simple solution for.

In terms of the markets, and who would inspire the most confidence from Wall Street and investors....its hard to say.  I'm leaning toward thinking Trump would be better, but then again maybe not.  I think many retail investors would see a Trump presidency as a positive for business.  But the professional investment community also prefers the known to the unknown....and while Clinton seems to be for sale and willing to bend, will the Donald show equal flexibility and a willingness to cater to big business interests?  How will big capital (much bigger than DT's net worth) react if he's unwilling to listen?

Anyway my Yankee friends, its your choice, such as it is.

I was living in the US during the 1972 election between Nixon and McGovern.  My public school had a straw vote, and they let me vote even though I wasn't an American citizen.  Anyway I voted for Nixon, and he won my school's mock vote by probably the same margin that he swept the country with.

When I got home my mother asked me what happened at school.  When I told her about the election she asked who I voted for.  A lifelong left wing liberal thinker...she just about hit the roof.  Years later, whenever we disagreed during a political discussion she'd always say:

"Well, what do you know anyway?  You voted for Nixon"!!!

Somehow I think years from now...there will be people saying the same thing to those who voted for the eventual winner. Whether its Trump or Clinton who ends up getting the job as Commander In Chief, I think its the American people, and maybe even us Canadians too, who will end up the losers.

A penny stock poised to make MASSIVE long term gains!!!

You've probably come here because you're tired of watching penny stocks take off for big gains and missing the boat.  Maybe you have a friend who bought a stock for something like 10 cents and then saw it explode to $1 or $2 allowing them to realize incredible profits of 1,000% or even higher.  

Wouldn't you like to be one of the players turning hundreds of dollars into thousands, thousands into tens of thousands, tens of thousands into hundreds of thousands....maybe even millions.

You're probably familiar with what is generally called a "pump and dump".  And its not just penny stocks, it can happen on more senior exchanges like the Nasdaq as well.  Hype and promotion are not exclusive to the OTC.  Typically you're looking at companies that have negative earnings, businesses with a history of using their shares to fund operations and for things like rent and to pay salaries.

But that's not what you're looking for.

• You want to "invest" in a solid company.  
• You want a low priced stock that you can tuck away in your portfolio without having to worry that one day the share price will collapse.  
• You want something stable that will deliver long term value.

If you're a momentum player, a penny flipper, someone who likes to catch onto pump and dumps with an eye to day trading for small percentage gains....GET LOST, THIS INFORMATION ISN'T FOR YOU!!!  

I am only interested in sharing this with genuine investors.  With people who are looking for a penny stock play with solid fundamental prospects for incredible gains and little to zero risk. I only want people who have a long term value perspective, even if it is just an OTC pink penny stock.

If that is you, then keep reading.

Are you ready for this information?  Are you salivating at the prospects of monster gains?  I won't make you wait any longer.....here it is.

YOU ARE A MORON, AN IDIOT, SOMEONE WITH MORE MONEY THAN BRAINS!!! YOU ARE, WITHOUT QUESTION, DUMBER THAN DIRT!!!

Do you really think someone is going to share information like this openly and freely on some pathetic blog or investor fourm?

If there is someone who knows about a penny stock that's going to explode, they're not gonna be looking for every Tom, Dick and Mary, giving this information away freely to anyone with a pulse and a trading account.

If someone knows about a 10 cent stock that's going to make monster gains they might let some close friends and family members in on it.  But they're not gonna start pumping and promoting it until they're ready to turn their shares into money by selling.  They'll keep mum until that time when they're looking to take those 10 cent shares and turn them into dollars, lots and lots of dollars.

My advice?  Grow a brain and come back to the markets when you're no longer a gullible fool.

Not convinced?  Still think you can search message boards, stock promotional sites, blogs and other social media outlets for hot trading ideas and find a solid OTC penny stock that will deliver incredible gains and long term value?  Well....you won't have to look too hard.   Click on those ads promising big gains, sign up for newsletters, troll some investor forums....it shouldn't take more than a few minutes.  

Before long you'll have an expert telling you all about some company with supposedly solid fundamentals that is pretty much a lead pipe cinch to be a big player in any number of industries.  It could be technology, a drug company, sports drinks, health food, retail, mining....you name it.

And anyone that dares to suggest its just some pump and dump....they'll be told "this one is different", that they don't understand the fundamentals.  They'll be accused of trying to talk the PPS down so they can buy cheap, or of being short.

Like carnies running the ring toss at your local county fair, stock promoters are looking for you long term players right now.  For people who think you can invest in an OTC Pink penny stock based on the prospect of forward looking fundamentals.  Don't let them down, and enjoy the comb.

Who shorts a penny stock and why? Lithium Americas

Lithium Americas is a penny stock.  I would put an asterisk after that however, because I don't believe it qualifies as your typical penny play for a number of reasons.

• LAC trades on Canada's big board TSX exchange, not the lower profile Venture
• The company recently announced a 50/50 JV with incumbent producer and NYSE listed SQM for their Argentinian project
• NYSE traded LIT, the only Lithium based ETF, has LAC as one of its holdings.

Regardless of those points however, LAC still qualifies as a penny stock by the strictest definitions.

With that being said, there is no hard and fixed rule for what qualifies as a penny stock.  For some any stock trading for less than one single dollar qualifies, others say $2, and some go as high as $5. Do note that in US funds LACDF is currently trading under $0.80 cents.

If you're looking to sell LAC short, for all intents and purposes it is a penny stock.  

I'm often surprised by the fact that a lot of retail investors really don't understand short selling. Pretty much everyone understands that its a ''bet'' that a stock's price is going to fall, but beyond that many don't understand how it works or how one might profit from it.

A PRIMER ON HOW SHORT SELLING WORKS

It might help to think of something other than stocks.  Imagine you have a friend with a really fancy watch, one that is Swiss made and is worth $5,000.  Now imagine you find out that this Swiss watch contains a cancer causing element, and that news is expected to be released in another week or two.

How might you profit from this knowledge?

You could borrow your friend's fancy expensive watch, maybe give him $100 to lend it to you saying you need to impress some people at a conference or something.  After borrowing the watch you then go out and sell it immediately, netting $5,000.  But of course your friend wants his watch back. When the news comes out about the carcinogenic element you're able to buy it back for say $100.  

You just made $4,800 from something you never owned.  $5,000 from selling the watch less the $100 you paid to buy it back and the $100 you gave your friend to loan it to you.   

Stocks are no different.  If you have say 100,000 shares of LAC (or LACDF) sitting in your brokerage account, then those shares could be loaned out to someone to be sold short, just as with the watch in the above example.  The individual borrowing your shares will have to pay a fee of course, and with penny stocks it can be hefty, but it can be done.  

If the 100,000 shares are sold for $1.00 CDN the short seller profits provided he is able to buy them back at a lower cost.  If LAC were to fall to .50 cents, then our short selling bear could take $50,000 out of the $100,000 he got from selling the shares short and buy them back, returning them to the broker they were borrowed from.  In this example the short player would have made $50,000 less brokerage and trading fees.

Clear as mud?

Take note though, shorting a stock is exponentially more risky than going long.  If you buy 100,000 shares of LAC at $1 per then the most you can lose is $100,000, that's a lot of money certainly, but its nothing compared to the theoretical losses a short seller could incur.  While a stock cannot possibly go below $0.00 there is no fixed limit as to how high it could go.  

CYNK was a penny stock pump and dump that went from around 5 pennies to up over $20. 

Imagine someone shorting 100,000 shares of CYNK at $1.00 and then being forced to buy it back for $10, $15 or $20....The shorting of 100K shares of CYNK at $1.00 nets $100,000 but if a margin call were to force the short seller to cover at $10, then those shares that netted $100,000 would cost $1,000,000 for a loss of $900,000....at $20 per share those losses double.  OUCHIE!!!

Shorts have to be hyper careful, obviously.  Bears have a reputation for being incredibly diligent in their research because of these risks.  And it is for this reason that I give bears a lot of respect. Facing the potential for losses that, in theory at least, could be limitless....they had better be pretty damn confident in their decisions.

That is why, if I see a stock with 10, 20, 30% or more of its outstanding shares sold short....I take notice.  There are stocks with big short interest of course, but typically they're trading much higher than a single Canadian dollar.   

SHORT INTEREST IN LITHIUM AMERICAS CLIMBS

LAC is nowhere near even 10% short interest however.  In fact its only at 1.14% as of June 30th 2016.

But the raw number is still enough to raise an eyebrow.  The number sits at 3,391,624 and again, that is current up to June 30th 2016 as per the site StockWatch.  Up to June 15th 2016 the number had been 3,044,216 for an increase of 347,408 shares.

In fact short interest for LAC has been climbing steadily since the company completed the merger with Western Lithium (former symbol WLC) and reverted back to trading under the symbol LAC.

Up to March 31st of this year the number of shares shorted was 769,200  By April 15th it had risen to over 1.7 million, then over 1.9 million as recently as May 31st and now (up to June 30th as noted) it sits at over 3.3 million.

On March 31st LAC was trading for less than 50 cents, by April 15th it had climbed to up around 80 cents. On May 31st the PPS closed at 85 cents and now it sits at $1.01 after trading as high as $1.15 on July 4th 2016.  

Obviously short sellers made a bad play.  Or did they?

If you're going to short a stock you better have deep pockets, and that goes double for a penny stock because of the higher margin requirements.  If you're using a discount broker like say BMO, TD or Quest then you can't even short a penny stock regardless.  There are firms that will accommodate those wanting to short penny stocks of course, but you better have a big bankroll.

Just for arguments sake let's assume that those 3.3 million of LAC that have been shorted, let's assume it is one single individual.  And again for arguments sake we'll say the average price they were sold at was .75 cents....half way between 50 cents and a buck.

3.3 million shares sold at .75 cents would net the short seller $2,475,000.00....a hefty sum certainly. But our hypothetical bearish friend doesn't get to go out and spend that money, it has to stay in a margin account.  And that's not all, to guard against a climbing share price our bearish friend will be required to have extra cash in that margin account, perhaps 100% more.  That would mean another $2,475,000.00 on top of what was made from selling the shares.

Our short selling friend now has close to $5,000,000 tied up.  And it gets worse.  LAC isn't trading for $0.75 now, its at $1.00....which means $3,000,000 to buy them back and at 100% an additional $3,000,000 in the margin account.  If the short seller can't come up with the extra million?  Too bad so sad, the broker can then use the $5,000,000 in the margin account to buy the shares back.  

I'm going to wrap this up, there's probably only one or two people who will even bother to read this all the way to the end anyway.

It is my belief that the short selling LAC has seen, that there's a good chance its being used by parties looking to inject some Fear Uncertainty and Doubt (FUD) into retail shareholders.  That or possibly due to Market Maker Broker Dealers (MMs) being surprised by the surge in buying.

If it is MMs, I don't see LAC making a big move until or unless that number declines significantly. If, on the other hand, its accumulators engaging in a little (perfectly legal) manipulation....then hopefully they've accumulated far more than what they're short and perhaps they might be willing to give up the little Wyckoff game, if that is indeed what they're doing.

What?  You've never heard of the so called Wyckoff Method?  Well then, here's some more reading for you:

Secret 1930s Trading Strategy That Hedge Funders Don't Want You To Know About

Brexit vote hammers the market

My last blog posted expressed the commonly held belief that Britain would vote to remain as a member of the EU, boy was I wrong.  I honestly thought it was a slam dunk.

With polls showing that it could go either way my rationale was simple.  When a vote of a contentious nature comes up, I figure the masses will vote for the status quo.  Its the old better the devil you know line of thinking.  I will say the results somewhat restored my faith in the democratic process.  I considered it very possible that there was going to be Florida style vote counting to tip the results in favor of remain if the exit side was winning.

But even though the Brits voted to leave in their referendum I still think expect Britain to stay in the Euro Zone for a number of reasons.  In no particular order here are some:

• While just over 70% voter turnout is amazing when compared to traditional participation levels, it still means that about 1 in 4 voters stayed home.  It also means that as a percentage of eligible voters only about one third of the total voted to leave.
• Scotland and Ireland voted heavily to remain.  Proceeding to negotiate with Britain's exit from the ECM could result in Ireland and Scotland leaving GB, certainly Scotland.
• Younger voters overwhelmingly voted to remain, while older voters were more likely to vote to leave.  That means those who will have to live the with decision the longest wanted the employment and mobility freedom that comes with staying in the Euro Zone.

Ultimately, if Britain proceeds based on the results of this contentious referendum, its going to be messy.  This is a divorce, and it will get ugly.

Here's hoping calmer heads prevail,  A second referendum would by my preferred option.

Britain - Will they stay or will they go? I say they're staying

There's always something happening in the world to put investors on edge.  Last year it was the recurring possibility of a US default on its debt, but as everyone knows it didn't happen.  Before that it was the situation in Greece.

Now its today's so called Brexit vote.  I am of the strongly held opinion that, again, its much ado about nothing, that Britain will remain in the Euro Zone.  When push comes to shove British voters will vote for the devil they know, as opposed to the devil they haven't known since 1973.

In any case it won't be long until we know, but not until after the closing bells ring on North American markets.  In the interim I expect a rocky day and then a big surge tomorrow when the results that Britain has voted to remain are announced.

Why the stock market can be worse than a casino.....

I'm not the first to equate investing in the stock market with gambling, lots of people have compared the public markets to a casino.  And that's never more true than with speculative and money losing companies, no matter whether they're OTC penny stocks or those listed on more senior exchanges like the Nasdaq.

I'm not a big fan of casinos, in the past five years I think I've only been once, during a weekend trip to Niagara Falls Ontario.  In fact the only casinos that I've ever been to are in Ontario, twice to Niagara, once to Rama, and perhaps about ten times to an Indian run casino up near Port Perry.  And that's over the past 20+ years.  

If you don't include the stock market I'm not much of a gambler.  Besides the odd visit to a casino I might play a game of Hold 'Em with friends once or twice a year. 

So why do I think the stock market can be worse than a casino?  The reason is simple, I think its easier to walk out of a casino.

When you sit down at a blackjack table and start betting sometimes you'll hit a a streak. Depending on the stakes you might go up a few hundred dollars in a short period of time.  Then you can choose to walk away, cash in and go home.  But once you leave the table you'll never know whether you would've have made even more money by staying, or if  you picked the perfect time to hit the cashier.  

While you're sitting at the table you can bemoan or congratulate yourself for not taking another card based on what the player to your right draws.  But once you leave its over, you'll never know whether you left at the right time.

The stock market is different.  Maybe you're watching a stock, my favorite hypothetical ticker symbol ABC, and its trading for $5.  You don't buy but you are watching.  Then big news comes out and it climbs 40% in one day, going to $7.  DAMN, I COULD'VE TURNED $10,000 INTO $14,000!!!

Maybe the reason you didn't buy ABC was because your money is tied up in another company, XYZ where you have 1,000 shares and its trading at $10.  You keep watching ABC and after its big 40% climb it pulls back and settles once again at $5.  Your 1,000 shares of XYZ aren't doing anything, still worth $10 each....so you dump them and use the money to buy 2,000 shares of ABC.  

So what happens?  Unlike a blackjack table where you'll never know what cards you would have been dealt after you leave the table, with stocks they keep trading and you can keep watching. Maybe XYZ, the stock you just sold for $10 gets big news of its own and climbs to $15, while the share price of ABC, instead of rebounding off the $5 price you bought in at, it loses support and falls even further to $4.  

Dontcha just love the market?

If you've ever played hold 'em then you probably have seen someone fold their hand and then ask to see what the flop would've been.  Then they want to see the turn card and the river.  Its happened to me. Say you're dealt a pair of jacks, after going ten or more hands of seeing twos and nines.  "Finally" you think, "a hand I can play".  Then the big stack tries to force you all in and you have a decision to make.  Do you risk your entire stack knowing full well you could be going up against AA?  If its a game with friends in your basement you might fold and then ask the dealer to draw out the flop, turn and river cards to see if you made the right choice.

That's sort of what the stock market is like, only worse....because the table never closes.  ABC and XYZ will probably be trading for years and you'll be able to look back whenever you want, to either congratulate or kick yourself.

And there's another reason I consider the stock market to be worse, social media. 

One of the things I don't like about casinos is that I often find the people in them to be anti social.  I'm a friendly guy, a talker....but at a casino table I find an awful lot of people who are deadly serious.  I assume that to be because they're probably gambling because they're in financial trouble and hoping lady luck provides them with a quick fix.  Its depressing.  When I see someone who's in a good mood and relaxed, that's someone I figure who is there for the right reasons, for fun.  I also find they're the types who tend to be lucky.  

My last trip to Niagara I walked out after about an hour with about $150 more than I walked in with....I think its part of that whole "law of attraction" thing. But I digress.

Where was I?  Oh yeah....why social media makes the stock market worse than a casino.  

Imagine going to a casino and being badgered to play at one table or another, or sitting down at a slot and having someone come up and start telling you the machine you're playing, that its a piece of junk that will never pay out.  That's what stock social media sites are like with all the pumping and bashing.

Some people say that comments posted to a message board or to sites like Stock Twits or Seeking Alpha don't matter.  I have a two word reply to that view, and the first word is Bull.  

Yahoo Message Boards, StockTwits, InvestorVillage, Investorshub, Stockhouse, RagingBull, SeekingAlpha, MotleyFool, InvestorsHangOut, 

That's just the tip of the ice berg, there are countless forums and social media sites where investors can go to read and express views on just about any stock trading anywhere in the world.  Why?  If message boards and such have zero impact why are there so many of them?  Because, in my not so humble opinion, they do.

Ultimately stocks trade on supply and demand.  Cards on the other hand, its luck of the draw.  

Every investment social media site is almost like a casino on the Vegas strip.  Each one vying for customers, and when you go in you'll be told what tables to play and which games to avoid.  In my opinion, if you're smart.....you won't listen.