Why free trading tips are dangerous?

In your real life, do you get any quality products/service at free of cost? Nowadays, you need to pay even for pure drinking water!

1.   Why someone will provide money making ideas (stock tips) at free of cost? 

• Their motive is to bring back their existing customer.  
• None of them are doing charity. 
• None of them have the motive of making you rich. 

2.   You will get dozens of free trading tips each day.

• Your broker is also eager to provide trading tips at free of cost. 
• Moreover, dozens of websites offer bunch of new trading ideas everyday totally free of cost. 
• Including Facebook and Whatsapp groups, the list of free trading tips provider would be very long. 

3.  Let’s have a detailed look on their motive –


Motive #1 – Many operators provide free trading tips after offering the same to their paid clients.

Thus, stock price gets manipulated which in turn helps only their paid clients. Suppose I have two websites; freetips.com and paidtips.com. One is for providing tips to paid clients and another for free clients. However clients don’t know that both the websites are operated by the same person (or same group of people). So, what I am doing is, I am offering tips to my paid clients first. After their  purchase, I am distributing the same to free subscribers.

While, free subscribers start buying the same stock, the price starts moving in upward direction. Exactly at the same time, I am recommending “Profit Booking/Exit” call to paid clients. Thus, free subscribers get stuck at the top. So, my paid subscribers are getting good return at the cost of free clients. My motive is to collect more subscription fees from paid clients!  This way one can easily manipulate the price of lesser known stocks (specially, midcap and small cap stocks).


Motive #2 – Operators often offer free tips just to have a smooth exit at hefty profit.

The company is in microcap category and I didn’t hear the name before than that. Trading volume was much higher on both the days and stock price appreciated a lot. The pattern suggested that the operator had sent the same SMS to thousands of retail investors and many of them purchased the stock. The most surprising fact is that on those days three operators sold quantities worth of the same stock. So, operators were selling a particular stock and simultaneously sending SMS to thousands of retail investors to buy for “sure-shot” target of doubling the money!

In the next 10 days the stock was hitting lower circuit continuously and stock price reached to below a fraction of the previous price. There were no buyers for the same and as a result it got stuck in lower circuit. Thousands of retail investors got stuck lost around 90% or more and expressed their anger.

Nobody is there to save them. With the advent of mobile phone and internet such practice is quiet common. Be careful from the next time if you receive such SMS!



4.   Why paid trading tips are sometimes more dangerous?

You can lose your investment amount from free trading tips but what about paid tips. Surprisingly paid tips can make you suffer more because in this you not only lose your invested amount but also your subscription amount. 

Short-cut to figure out fake stock tips provider

Be aware of trading tips provider.

• Trading includes intraday, short term, Futures and Options. 
• Be aware of high return promises. 50%+ monthly return promise is the almost sure-shot sign of fraud. 

You should only choose equity advisors who provide investment tips with detailed logic and proper report on the company.

Most trading tips providers don’t provide any logic. They just mention “Buy with target and stop loss”. Ask them what is the rationale behind the call? Find out whether you are getting any satisfactory answer or they are just avoiding it?

Don’t get fascinated by the fabulous past records and few clients’ testimony. Those can be false also. 

Various new methods are coming day by day to trap innocent investors. So, always be aware.

Our corporate punishments are the laughing stock among foreigners. A man was sentenced to 25 weeks in jail for stealing 80 pairs of women's panties.

Time for harsher penalties

By Zuraimi Abdullah

Published: 2010/06/07

There are many ways to destabilise or mismanage a company, and in Kenmark case, its top executive and directors from Taiwan went AWOL

There are many ways to destabilise or mismanage a company, and along the way, upset and annoy its minority shareholders.

In the case of Kenmark Industrial (M) Co Bhd, its top executive and directors from Taiwan went AWOL. The furniture maker's shares were sold down, losing some RM140 million of market value in a matter of days. The stock did bounce back, but not before a big damage was done and a new, "friendly" major shareholder was installed.

The latest file marked "How to upset your minority shareholders" involves Linear Corp Bhd. Initial company probe showed that one of its directors had used his autocratic rule to hand out RM36 million to a project owner/developer. The amount was an advance for a RM1.66 billion contract Perak Linear had secured from the developer, but appeared not viable.

Kenmark and Linear are among a list of listed companies that have run foul of corporate rules. Kimble Corp Bhd and Tat Sang Bhd are counted in the list, too.

Kimble, another Taiwan-owned furniture maker, breached a listing requirement in 2008 for failing to disclose in its fourth quarter 2007 results that it had made provision for doubtful debts of RM33.7 million.

Its managing director Datuk Yao Bor Bin and former executive director Yao Po Chen were fined by Bursa Malaysia a total of RM75,000 "for being ambiguous and inaccurate in the announcement". The company was delisted in April 2009.

Tat Sang, another furniture maker, shocked investors with its accounting irregularities and the disappearance of key management personnel back in 2002.

Its former managing director Lim Chai Hock was sentenced to five years' jail by the Sessions Court for making false statements to Bursa Malaysia. The sentence was revised by the High Court to a five months' jail and a fine of RM200,000 in default of two months' imprisonment.

Tat Sang was plagued with financial woes just a year after its listing in 2000. It was eventually delisted in 2003.

The point here is that once a corporate manipulator is caught and goes to court, make sure he (interestingly, women is almost or non-existent in the issue) is punished accordingly.

While our local stock market watchdogs, the Securities Commission particularly, may have been swift in their action, the punitive measures appear lenient on corporate manipulators.

Some have said in jest (or are they not kidding?) that our corporate punishments are the laughing stock among foreigners. Swindle loads of money from your company and leave the country, you can then come back and face the low-decibel music.

We may have read that a man was sentenced to 25 weeks in jail for stealing 80 pairs of women's panties. For mismanaging or embezzling millions of ringgit or causing hurt and grievance to many investors, you just get a fine or a brief spell in prison. Some balance in blue and white collar crimes, right? Is there a very fine line in steal, cheat or lie between a corporate man and an ordinary Joe?

In February 2006, it was reported that Fountain View Development Bhd former director Datuk Chin Chan Leong and ex-remisier were found guilty of share manipulation.

Chin was fined RM1.3 million or in default of 13 months' jail as well as sentenced to serve one day in prison for manipulating its share price seven years before.

Hiew Yoke Lan, a former Avenue Securities Sdn Bhd remisier, was fined RM1 million or 10 months default jail sentence for abetting Chin in the offence.

The offence was committed between November 18 2003 and January 20 2004. During this period, Fountain View stock had a low of RM1.99 and a high of RM6.15.

Back in November 2003, at a low of RM1.99, Fountain View carried a market capitalisation of RM885 million. At the peak of the share manipulation of around RM6.15, Fountain View carried a market capitalisation of RM2.73 billion!

If Datuk Seri Idris Jala can overhaul the various subsidies enjoyed by us, how hard can it be to review and slap the harshest possible punishment on corporate manipulators?

Read more: Time for harsher penalties http://www.btimes.com.my/Current_News/BTIMES/articles/zuview6/Article/index_html#ixzz1fhYjGpf6

How to Cheat at Everything

HOW TO CHEAT AT EVERYTHING

Over lunch with Simon Lovell, a fascinating former card shark, Allison Schrager learns all sorts of things about how swindlers operate ...

Special to MORE INTELLIGENT LIFE

"I can spot someone's weakness a mile away. In any room I can pick out the best target," says Simon Lovell, reformed con artist and famed magician, when asked over lunch about the root of his talents.

"Take that woman over there." He motions across the room towards a lady speaking to a man engrossed in his menu--"vulnerable, needy, looking for attention from the man she is with, but he won't give it to her. She even lacks the social skills to get the waiter's attention."

"Or that man over there, over-dressed, too neat, over-confident, thinks he is too smart to be taken." He says, pointing to a middle aged man in a neat suit, with excellent posture.

"But ultimately, anyone can be conned, if you have the balls to do it."

Simon Lovell should know. He spent many years pulling cons, indulging in everything from swift bar games to more elaborate schemes. A fascination with magic as a child eventually led Mr Lovell to hone his skills as a sleight-of-hand expert, and then as a professional card cheat.

Presently, instead of subjecting people to cons, Mr Lovell stars in a one-man off-Broadway show, "Strange and Unusual Hobbies". The performance consists of a mix of comedy, anecdotes from his card-shark days and elaborate card tricks (I once saw him pull a missing card from his mouth). He's vaguely English, 50-ish, handsome (in an ageing Peter O' Toole way), and very slight--the result of a balanced diet of beer and cigarettes. With his young, blonde girlfriend in tow, he explains what it takes to be a successful con artist.

"I could sell shit at an anti-scat party," he says, "you have to figure out someone's wants and needs and convince them what you have will fill their emotional void." A con man is essentially a salesman--a remarkably good one--who excels at making people feel special and understood. A con man validates the victim's desire to believe he has an edge on other people.

It requires avid study of psychology and body language. It's an amazing paradox--a con man has incredible emotional insight, but without the burden of compassion. He must take an intense interest in other people, complete strangers, and work to understand them, yet remain detached and uninvested. That the plan is to cheat these people and ultimately confirm many of their fears cannot be of concern.

Mr Lovell draws people in by mirroring their body language. He breaks their defences by entering their physical space.

* * * * *

Con men tend to be excellent conversationalists. "Many men kissed the Blarney Stone," Mr Lovell likes to say, "a con man has swallowed it." A con man puts a victim at ease by telling a story that reveals his own rather similar anxieties, thereby forging a "mutual understanding" of sorts.

"Now you can prey on their emotions and do evil--because con men are evil, undeniably so," Mr Lovell says. He smirks, admitting pride in past cons.

Just then we are interrupted by our waiter. Mr Lovell notes his British accent, immediately parroting it. The waiter, it turns out, is from north-west London, and the conversation turns to a lively discussion of Watford football.

Once the waiter is out of sight, Mr Lovell explains: "You must have an encyclopaedic knowledge of odd bits of trivia and use these facts to win people over. "

A favourite con of Mr Lovell's is called the Cross. It is a fairly complex card trick that takes place over two or three days. "Go to a bar late at night to look for your victim," he explains. "Pick someone well-groomed, maybe a little dishevelled, but well-dressed. Someone who clearly has some money, but has something on his mind. He is vulnerable. Sit down next to him, have a few drinks, start to mirror his body language, get him talking."

As the conversation progresses, Mr Lovell will start showing the man some card tricks. "They must be really good and impressive ones," Mr Lovell warns. "After all, you have to know what you are doing."

At this point in the game he reveals that he is, in fact, a professional card cheat. A smart man will run in the other direction, but most are seduced. People love the idea of a professional swindler--they find it glamorous. They figure the world is full of suckers, but of course they are not among them. They are in on the game.

He then unloads his problems on the guy, perhaps something about a partner getting arrested for a small crime, leaving him without a partner for a big poker game the next day. The victim will then almost invariably offer to help. Mr Lovell will question his toughness, but the man will insist he can handle it. With a touch of hesitation, Mr Lovell will then offer to test the man's skill by taking him to a small game that very night. He will even put up the money.

At the game, Mr Lovell explains, he will tell the victim to go all in when he taps the table. Mr Lovell has allegedly figured out a way to determine the hand of each poker player as he deals the cards. It is a skill he spent years honing, and he displays it proudly in his one man show. (Rumour has it casinos in Las Vegas have banned Mr Lovell.) With this gentle coaching, the victim wins the pot, about $500, and is elated. He's ready for the big game the next day.

That game, of course, is for much more money--a $15,000 buy in--and the man must pay his own way. But you agree to split the pot, and the victim by this point is very excited. He is feeling special; he thinks he's in on it. The game should take place somewhere dark and illicit, maintaining the victim's illusion that he is somewhere exciting and covert. At this point he will probably start mimicking the other players, speaking like them. Non-smokers will start to smoke, feel cool.

During the game, Mr Lovell will give the signal (tap the table). The victim will have a strong hand, but someone else's at the table is better, and he loses. Mr Lovell will then storm out angry, violent even. "You blew it--you should've waited for my signal. I should have never gotten involved with such an amateur!"

The next day Mr Lovell will apologise for losing his temper. He might even invite him to another game that night. It bears noting that the money the victim earned the first night was counterfeit and everyone at both poker games is in on the con.

* * * * *

Back at lunch, our waiter returns with a complimentary round of drinks and free desserts, beaming.

At some point, Mr Lovell realised he could no longer be an effective con artist. Perhaps he pulled one Cross too many. Once, when he visited a victim the day after to "apologise", he found the man crying about his mortgage, wife and kids. Mr Lovell actually felt sorry for him. Sorry enough to return some of the money: "Not all of it. I am not an idiot. But some."

This seemed to foretell the end of something. "If you feel sorry you are dead in the water," he warns.

He stopped earning his living as a card cheat about 20 years ago, using his skills to entertain and educate the masses (and turn a buck or two) instead. He also authored a book: "How to Cheat at Everything: A Con Man Reveals the Secrets of the Esoteric Trade of Cheating, Scams, and Hustles", which documents the scams pulled by him and his friends. I gleaned enough tips from my own copy to score a free round of drinks on my own, though Mr Lovell claims he wrote it to make people more aware of tricks.

A conversation with a con man can't help but be confusing. Separating truth from fiction feels futile. Yet Mr Lovell is genuinely charming, and I admire the interest he takes in others. His flawless ability to please people--I've witnessed others grow noticeably more comfortable, even happy, in his company--has inspired me to become more thoughtful and considerate of the needs and desires of others. And I have since found that this is also an effective way of getting what I want from people.

But I would make a poor con artist. Not only am I unable to divorce myself completely from feelings of compassion, but also it is thoroughly exhausting to be deeply aware of everyone's emotions at all times. Like most people, I am far too self-involved to make it as a cheat.

Photo credit: Theresa Hong (above); Boa-sorte&Careca/flickr

(Allison Schrager is an economist based in New York. Her last column, called "Does one Abused Woman = 100 Abused Puppies?" was about the fundraising challenges faced by charities dedicated to helping battered women.)

http://moreintelligentlife.com/story/how-to-cheat-at-everything

Some light reading for the holidays.  :-)

Several common manipulative activities of stock market syndicates

Market syndicates have been around for many decades and their stock manipulative activities have been felt in the United States, Singapore, here and every other market around the world. Their objective has always been to push up share prices and then unload the high-priced shares on punters.


There are several common aspects of stock manipulators, brokers said, and these are some of them:


Scenario one: The IPO route

These stock plays are pre-planned even before the shares are listed on Bursa Malaysia. As the major shareholder may be imposed with a moratorium from selling any of their shares, he would park some of his shares under nominees. The shares in the names of nominees would not come under the moratorium.

The major shareholder would then place out a block of the new shares issued under the initial public offering (IPO) to a stock operator. Let's say the operator gets the shares at 50 sen a piece.

On the listing day, the stock operator will whack up the price of the shares to say RM1 and a day or a few days later, start selling the shares. He won't be able to unload all his shares at the top, but could achieve an average price of say, 70 sen.

If the major shareholder and stock operator manage to distribute (the industry term for unload) 30 million shares, they'd get to share a profit of RM6mil.




Scenario two: Sell pricey stocks to fund managers

In this kind of scheme, the syndicate will push up the share price from say, RM1 to RM3. The syndicate will then place out (industry term for selling sizeable blocks of shares) to fund managers. The fund managers would be induced to buy the shares with a commission secretly paid to them by the syndicate. If the commission is say, 20 sen on five million shares, the fund manager gets RM1mil.

Placing out shares to fund managers has the advantage of holding up the share price for a longer period of time. There would be an understanding with the fund manager that he should not immediately sell the shares into the market.

The syndicate would then continue to ramp up the share price. Inevitably, however, the syndicate will sell off his shares and they usually leave in a hurry. The fund incurs a loss but the fund manager has personally profited with the commission.
  



Scenario three: Sell pricey stocks to punters

This is the stock manipulation scheme that punters are familiar with. A syndicate gets a block of shares of say, two million from a major shareholder and churns a daily trading volume of say, five million shares. This is done by buying and selling the same shares over and over again by syndicate members and their nominees.

The churning is done in such a way that the share price goes up every day, irrespective of sentiment on the market.
The trading activity and rising price momentum gets the attention of punters. The more experienced punters usually recognise the share price is being ramped up. Nonetheless, they pile in to make a fast buck, and hopefully get out before the syndicate withdraws support for the share price.

There will be, however, punters who are newer to the game or have more greed and they stay too long in the stock. When the syndicate sells out within a day or two, usually causing the stock to trade limit-down, punters lose their shirt.

The profits of the syndicate are shared with the company's major shareholder. Usually, this involves companies that are loss-making in their business. Ramping becomes the only way the major shareholder can make a profit.

Source:
http://www.investlah.com/forum/index.php/topic,32721.msg646663.html#msg646663

Sharks, syndicates, big bosses, speculators, liars, cheaters or stock market manipulators.

I believe that most of us have heard of stock market operators. They are known by many different names and they are constantly the blame for our financial losses. In some parts of the world, they are known as sharks, syndicates, big bosses, speculators, liars, cheaters or stock market manipulators. Some of us cheer their existence and their operations while some cursed them as if they are the culprits to our financial ruins. Are they our friends or foes? As the famous saying goes, know thy foes and you will have the upper hand in battle. In this post, I will challenge and dare you to swim with the sharks and eat from the crumbs of their feeds and not to be their feed. Here I would like to bring out some of my personal thoughts on this question that most newbie has.

Ok, here is the short answer. Yes, you are right. They existed and their operations are hidden from most people especially the newbie in these financial markets. I believe if we know them and how they operate, we could actually move along with them. In fact, the whole purpose of technical analysis is to determine the balance of demand and supply and the stock market operators are some of the powerful and rich individuals or groups with much buying and selling power. If we are able to track their movement, we will be able to profit from their operations. However, if we are ignorant of their existence, we could be their next meal.


Basic facts of stock market operators are listed below for your reference.


**They work individually or in a group.
**They rely on the market trends to help them in their mission.
**The general publics are their big customers.
**They together work with the public listed company owners or insiders.
**They have a main mission objective to accomplish.
**The bulk of their operation revolved around the accumulation and the distribution of stocks from / to the general publics.
**They are rich and powerful figures but they are also humans that have emotions like all of us.
**They have extensive credit facilities and lower transaction costs than the retail investors.
**They do make mistakes like any one of us. Their mistake costs millions in dollars.
**Market news, stock market analyst, corporate announcements, word of mouth advertising, price bidding and order queues are some of their tricks and tools that they used to achieve their main objective.
**They don’t try to pick the bottom or the top like most retail investors do. Again, some of them try to do this and it costs them much sorrow and dismay.
**They do attempt to manipulate the chart to trick the chartist whether you like it or not.
**They are both the buyer and seller in the queue order at any given time.
**They are not doing charity work. They existed to make your money.


It is important to understand them well as they are big volume buyers and sellers. They can tilt the balance of demand and supply. Understanding the above traits of stock market operators will help to clear some of the myths that we have of them. Remember, they are humans like us. Some of the above points deserved to be elaborated further to bring out the secrets of trading methodologies that we will employ in our technical analysis.

Primary market trends are very important to their success and failures. If they judge wrongly on this, they could go bust easily as the power of leveraging will work against them. Remember this, they cannot fight against the trends and they don’t have the strength to do so. Don’t ever think that they can swim against the tides.

If their mission objective is to acquire stocks, they might push down the prices to cause temporary market panics to squeeze out the stocks out from the speculators and investors and this is especially true in certain countries where short-selling is not allowed. The success of this technique will depends on what sort of people that are holding the stocks. This will get rid of the intraday and short term traders. However, they will try to maintain the prices around a certain range as to keep the sellers motivated. Usually the public listed company owners and insider will work in tandem to collect the shares from the general public. After they exhausted the fearful speculators and investors, they will then turn their eyes to the stronger speculators and investors by pushing up the prices higher to catch their interests.

If their mission is to distribute stocks, they will push up the stock prices to catch the attention of speculators and investors. They will work with market analyst to create beautiful pictures of the company prospects. They will work with the public listed company owners and insiders to create scarcity of stocks. At this moment of time, they will also announce all the good news while pushing up the stock prices. They will queue up as buyers and sellers in the order queue. They will buy their own stocks to create volume to entice the crowd to follow. As they bid up and down the prices, stocks were distributed without the awareness of the general public.

I believe that this write-up will increase our trading knowledge and make us a wiser trader. I will continue to write of how we can profit from their operation in future posts whenever I managed to get my time organized.

Source:
http://www.investlah.com/forum/index.php/topic,32721.msg646677.html#msg646677

Bursa Malaysia Reprimands Dealer Representative For False Trading

July 08, 2010 18:26 PM

Bursa Malaysia Reprimands Dealer Representative For False Trading

KUALA LUMPUR, July 8 (Bernama) -- Bursa Malaysia Securities Bhd publicly reprimanded, imposed a fine of RM100,000 and ordered to strike off Lee Beng Huat a commissioned dealer's representative (CDR) with Kenanga Investment Bank Bhd, from the Register for false trading and market manipulation.

In a statement, it said Lee had carried out false trading and market manipulation in his dealing activities in the shares of Axis Incorporation Bhd of approximately 41 million shares out of the market turnover of 104 million Axis shares for 87 trading days in 2006-2007.

During the said period, Lee had dealt in Axis shares predominantly through the accounts of 10 clients (10 Accounts).

The statement said he had entered buy and sell orders which were manipulative in nature and led to false or misleading appearance of active trading in, or market for, Axis shares and this tantamounted to stock market manipulation.

The breach by Lee, among others, involved entry of orders by Lee which were several bids lower than the last done price with no real intention to have the buy orders matched.

Lee also engaged in order splitting, entering a series of buy orders in succession through any one of the 10 Accounts with the same price which gave rise to, and created an impression, of continuous demand for Axis shares which led to false or misleading appearance of active demand/market for Axis shares.

Therefore, the buy and sell orders executed in the 10 Accounts had cross trades which were matched among each other for approximately 12 million units of Axis shares involving Lee as their common CDR in carrying out dealing activities in Axis shares in their accounts.

By engaging in False Trading and Market Manipulations, Lee managed to sell about 72 per cent (or 40.98 million out of 56.67 million units) of the sell orders entered for the 10 Accounts and bought 55 per cent (or 41.6 million out of 76.14 million units) of the buy orders.

The higher volume and percentage of the buy orders, which were subsequently cancelled and/or lapsed due to the orders being lower than the market/last done price resulting in lower percentage of buy orders matched, not only gave an impression of and created an inflated demand for Axis shares but also led to a false or misleading appearance of active demand/market for Axis shares.

-- BERNAMA

http://www.bernama.com/bernama/v5/newsbusiness.php?id=511931

The Way The Stock Market Works.

The Way The Stock Market Works.

I have come to the conclusion that the market is (dare I say) generally being manipulated/influenced by firstly the large institutions, Secondly by full time professional traders and day traders.

The general public and the “Mum and Dad” investors are the last to know what is actually happening and invariably the ones that lose out in the long run.

The advantage the Institutions have is the “Millions” of dollars that they have available to use at any given time. This is usually obtained from the public in the first place, in the form of Insurance, Superannuation and Managed Funds etc.Which we (the general public) all contribute to on a daily basis.

The large advantage they have is the enormous amount of shares they are able to purchase at any given time.

What occurs is that even a small movement in share price means big profits for them, because of the volume/turnover of shares which occurs whenever a share transaction takes place.

Now Volume is the “Fuel” driving the market. An uptrend in share price to survive and to continue must be nourished by new buyers who are being fed by cautious, seemingly reluctant sellers.

Consistent volume is very important, if there is to be any change in the existing trend. There must be a surge of buyers or sellers capable of changing the current share price.

Remember for every “Seller” there has to be a “Buyer” and vice versa.

The seller thinks or knows the share price is going down and the buyer thinks the opposite.

Now too much selling will invariably force the price downwards as will too much buying forces the share price upwards. This is the law of “supply and demand”.

This “Law” is taken advantage of by the large Institutions who are well aware of what happens when they buy or sell huge volumes.


Some Reasons Why Share Prices Go Upwards.

It’s always a good idea to look at stocks that have jumped in price to see what clues where there beforehand. By gaining a greater understanding of what happened before stocks jump in price, it can give you a better chance of being on board some of the next ones.

When the share price increases, it means that the buyers (on average) want to buy larger parcels of shares. When people buy large parcels of shares it generally means that they are very confident in the stock and its future prospects.

A large increase in Smart Money (Traders in the know) and Buyer Demand can occur before a large jump in price happens. This information lets you know that other people are very interested in this stock and are prepared to spend big money on it. This can be another good clue.

When you see large spikes in Buyer Demand when the price is starting to rise upwards it often indicates that the stock is set for a much longer bull run. The rushes for stock are caused from either news or rumors and (as long as there is no bad news) this activity will then start attracting attention from other traders.

Another great clue is to be found when Directors are buying there own stock. It means that they must have confidence in their own company to invest money in it. You can find out when Directors are buying and selling by checking the ASX company announcements on a daily basis.

Companies are on strict instructions to notify the ASX when ever a Director buys or sell shares in his company. Directors buying are usually based on a profit motive.

Christopher Strudwick is a keen amateur share trader on the Australian Stock Market Visit his weblog for more free articles and useful information at http://www.asxnewbie.com


Read more about • The Way the Stock Market Works | My Stocks by mystocks.netai.net

http://mystocks.netai.net/5105/the-way-the-stock-market-works/

Stock Market Operators: Do they exist?

I believe that most of us have heard of stock market operators. They are known by many different names and they are constantly the blame for our financial losses. In some parts of the world, they are known as sharks, syndicates, big bosses, speculators, liars, cheaters or stock market manipulators. Some of us cheer their existence and their operations while some cursed them as if they are the culprits to our financial ruins. Are they our friends or foes? As the famous saying goes, know thy foes and you will have the upper hand in battle. In this post, I will challenge and dare you to swim with the sharks and eat from the crumbs of their feeds and not to be their feed. Here I would like to bring out some of my personal thoughts on this question that most newbie has.


Ok, here is the short answer. Yes, you are right. They existed and their operations are hidden from most people especially the newbie in these financial markets. I believe if we know them and how they operate, we could actually move along with them. In fact, the whole purpose of technical analysis is to determine the balance of demand and supply and the stock market operators are some of the powerful and rich individuals or groups with much buying and selling power. If we are able to track their movement, we will be able to profit from their operations. However, if we are ignorant of their existence, we could be their next meal.

Basic facts of stock market operators are listed below for your reference.

They work individually or in a group.


They rely on the market trends to help them in their mission.


The general publics are their big customers.


They together work with the public listed company owners or insiders.


They have a main mission objective to accomplish.
The bulk of their operation revolved around the accumulation and the distribution of stocks from / to the general publics.


They are rich and powerful figures but they are also humans that have emotions like all of us.


They have extensive credit facilities and lower transaction costs than the retail investors.


They do make mistakes like any one of us. Their mistake costs millions in dollars.
Market news, stock market analyst, corporate announcements, word of mouth advertising, price bidding and order queues are some of their tricks and tools that they used to achieve their main objective.


They don?t try to pick the bottom or the top like most retail investors do. Again, some of them try to do this and it costs them much sorrow and dismay.


They do attempt to manipulate the chart to trick the chartist whether you like it or not.


They are both the buyer and seller in the queue order at any given time.


They are not doing charity work. They existed to make your money. It is important to understand them well as they are big volume buyers and sellers. They can tilt the balance of demand and supply. Understanding the above traits of stock market operators will help to clear some of the myths that we have of them. Remember, they are humans like us. Some of the above points deserved to be elaborated further to bring out the secrets of trading methodologies that we will employ in our technical analysis.

Primary market trends are very important to their success and failures. If they judge wrongly on this, they could go bust easily as the power of leveraging will work against them. Remember this, they cannot fight against the trends and they don?t have the strength to do so. Don?t ever think that they can swim against the tides.

If their mission objective is to acquire stocks, they might push down the prices to cause temporary market panics to squeeze out the stocks out from the speculators and investors and this is especially true in certain countries where short-selling is not allowed. The success of this technique will depends on what sort of people that are holding the stocks. This will get rid of the intraday and short term traders. However, they will try to maintain the prices around a certain range as to keep the sellers motivated. Usually the public listed company owners and insider will work in tandem to collect the shares from the general public. After they exhausted the fearful speculators and investors, they will then turn their eyes to the stronger speculators and investors by pushing up the prices higher to catch their interests.

If their mission is to distribute stocks, they will push up the stock prices to catch the attention of speculators and investors. They will work with market analyst to create beautiful pictures of the company prospects. They will work with the public listed company owners and insiders to create scarcity of stocks. At this moment of time, they will also announce all the good news while pushing up the stock prices. They will queue up as buyers and sellers in the order queue. They will buy their own stocks to create volume to entice the crowd to follow. As they bid up and down the prices, stocks were distributed without the awareness of the general public.

I believe that this write-up will increase our trading knowledge and make us a wiser trader. I will continue to write of how we can profit from their operation in future posts whenever I managed to get my time organized.


http://stockmarket.tailou.com/viewtopic.php?f=23&t=3807&p=26266

Speculation and Manipulation in the Vietnamese Stock Market

Swimming with shark


Last updated: Saturday, December 5, 2009 |

VnnNews – Predatory stock ‘sharks’ hunt in packs, grouping together to invest big money small-time companies to boost share prices and feast on profits.

Big-time investment “teams” whose members are known as “sharks” have been fixing stock prices by investing via several different accounts to manipulate market sentiment, a Thanh Nien investigation has found.

Though Vietnamese law only allows stock market investors to open one account at one brokerage firm, sharks use accounts opened by their friends and family to place buy and sell orders.

With combined financial resources of up to thousands of billions of dong (dozens of millions of dollars) bolstered by leverage from brokers, a team can fix the price of any stock with a flood of sell or buy orders.

Saigon Securities Inc. stocks were hit by a team of sharks earlier this year. The predators were able to push the price of the major blue-chip public company up nearly four-fold from mid March to early June, a shark in Hanoi told Thanh Nien.

But in many cases, the sharks focus less conspicuously on small or newly listed stocks. Thanh Nien found out that sharks had doubled stock prices at least three Hanoi-listed Song Da Corporation subsidiaries, as well Vinavico Company and the Education and Finance Investment Company, for short periods of time this year.

A shark told Thanh Nien that small companies with a chartered capital of less than VND50 billion were often the targets of big predators. The ideal firms to “hit,” he said, were those with 50 percent stakes owned by board members and other executives who are not allowed to sell within six months after the issue. He said Vietnam’s stock environment was perfect for sharks because it nurtures rumors that easily fuel price hikes.

At such companies, board members and executives’ relatives usually hold another 20 percent, so only about 30 percent of shares are actually traded in the market, a broker whose clients are mostly sharks told Thanh Nien.

“[Sharks] only need to buy about 1-2 million shares to be able to manipulate the market prices of that stock,” said the broker, who refused to be named.

The sharks’ manipulative power has become so strong that small investors, who once based their decisions on foreign investors‘ moves, now bet on shark intelligence.

VIPs

It’s no wonder that many brokerage companies who enjoy hefty fees from big-time investors welcome sharks as VIPs, offering them many privileges that in turn help multiply the sharks’ strength.

Since many brokerages are owned by banks, they are also able to offer attractive leverages. Most sharks only need to provide 20-30 percent of a security’s value for a purchase, the rest is funded by the brokers. In some special cases, the leverage could be as high as 9 to 1.

“It’s the leverage that helps create ‘super investors.’ Cash can’t,” a Hanoi-based shark told Thanh Nien, adding that very few investors actually possess hundreds of billions of dong in cash.

While normal investors can only sell a stock four days after they buy it, many brokers also let sharks sell a stock within three days of purchase, allowing them to make quick profits or retreat in times of strong market fluctuation.

Sharks and brokers have also joined hands to spread rumors and “reveal” information that can help them fix prices.

Such “intelligence” is in fact highly valued by many opportunistic investors who do not care about studying the official statistics of listed companies in which they want to buy stocks.

One such investor, known only as N.V.T., said the purchases made on “mainstream” stock consulting are like “buying government bonds.”

“Following sharks is risky but hugely profitable,” he said.

The limits of power

However, one shark, who preferred not to be named, told Thanh Nien that the big investment teams were in fact not that powerful.

“[Big-time investors] can fix prices successfully mostly because they follow market trends to inflate prices of a certain stocks. It’s not that they can manipulate the market at will,” she said.

“When the market becomes really bearish, not even the big-timers, nor even god, can push stock prices. Fleeing is the best policy then.”

Indeed, many sharks admitted that the bear market since late October had left many of them “soaked in blood” as their leverages – their beloved weapon – turned out to be double-edged swords.

Black Friday

The 23rd of October this year is a painful memory for many sharks. The VN-Index has been bearish since then, falling from the peak of 626,14 to under 500 this month. Within just 10 days of that dark Friday, the index plummeted by nearly 60 points.

“For 10 consecutive days, I lost VND1 billion each. It was so painful,” said a shark in Hanoi known as H. Stock brokerage companies, which had treated big investors like kings, began preying upon the predators to recover their loans.

H. said leaders at the brokerage where she had accounts told the media that they did not force investors to sell when the VNIndex fell.

“Indeed they did not have to force anyone,” H. said with sarcasm. “On their own, they sold investors’ stocks to get claim their debts.”

Many investors who had been leveraged 4-to-1 said their brokers sold their stocks after just two bearish sessions. This practice usually ignites a vicious circle: other investors, seeing bigger ones selling en masse, also rush to sell, which drives prices further into the deep south and thus inflicts even more damage to the sharks’ pocketbooks.

At the same time, the central bank recently asked brokers to strengthen a ban on short-selling stocks, reiterating that investors can sell only stocks that they own in their accounts, meaning the soonest they can sell a stock is four days after they buy it, nullifying the sharks’ advantage of first sale.

As a result, sharks have “bled all over the floor,” said an investor who requested anonymity.

Fall from grace

In a bearish market, big speculators are always ready to break their relations with, or even betray, their “teammates,” brokers told Thanh Nien.

“When the market is bullish, they work closely together to push prices and fix prices. Everyone is too happy looking in the same direction. But when the wind turns, everyone cares only for his fate,” a deputy CEO of a Ho Chi Minh City-based brokerage said.

Some sharks told Thanh Nien their “shoals” broke a few days around October 23 when some “teammates” secretly sold their stocks at low prices to cut losses while the teams had agreed to push prices to higher levels.

In one such case, a big-time team agreed to push Ha Nam Mineral Company (KSH) stock prices to VND100,000 apiece, a shark told Thanh Nien. But some members who sensed a market U-turn coming, secretly sold the stocks at just VND82,000. The team’s whole plot then collapsed, as did the stock price, which now stands at just around VND50,000.

Intelligence on big-time teams’ plans to fix prices, once eagerly sought, embraced and followed by small investors and even some brokers, is now shunned as fraudulent rumors the biggies set up to sell their own stocks.

In fact, the trust in the “biggies’ stock market control power” vanished within a week of October 23, some investors said. During that week, small investors more than once pinned high hopes on the return of the bull market based on rumors that sharks would push the prices of a certain number of stocks. It turned out later, however, that it was a trick the sharks used to clear their own stocks.

VietNamNet/Thanh Nien


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Sharks a valuable part of the food chain: Brokerage director

Le Dinh Ngoc, general director of the Hanoi-based Thang Long Securities Company said “shark” investors played a valuable role on the market, describing them as “professional investors.”

“They create demand. They merely invest in stocks and do not do anything else.”

Ngoc said the risks that these investors caused to the market should be considered side by side with the contributions they make.

His counterpart Nguyen Dinh Phong from VNDirect Securities Joint Stock Co., also in Hanoi, said shark investors created high liquidity and made trading more active.

These investors are also believed to enrich their brokerages as they pay brokering service fees of VND500 million to VND1 billion a month, a senior executive at another brokerage company said.

However leaders from other brokerages such as Bao Viet and Ban Viet said brokerages that offer privileges to VIP investors have robbed law-abiding brokerages and have helped big investors knock out smaller ones.

Nguyen Hoang Long, a small investor in Hanoi, said “When the market was rising, I could never buy although I tried many times, and I couldn’t sell either when the market was going down.”

Another investor in Hanoi named Le Thi Huong said in anger that “the stock market should be a transparent place that offers equal chances for anyone.”

A senior official from the State Securities Commission, who requested anonymity, told Thanh Nien “It is not that we don’t know about the pricing tricks, but investigating these claims and finding evidence to punish people involved is not easy.

“The investors can say they bought a certain stock because they found it promising. That’s not violating the law, for sure.”

A senior investigative officer from the commission said an investigation was possible but needed to be planned slowly and carefully, otherwise the commission would be shamed if both investors and brokerages manage to evade punishment.


http://www.vnnnews.net/swimming-with-shark