Since I decided again to invest in and sometimes to trade in the stock market it has been interesting to see how much froth and volatility there is on todays markets.
I’m going to just dive in and waffle, see if it all makes sense to you.
Firstly there seems a massive impatience towards quick success, almost as if there is no real acknowledgement of success unless you managed to make it in the day, or in the next hour, next few seconds. There appears a massive NOW NOW NOw, otherwise you failed.
Next there seems a lack of respect for other people’s opinions and other people’s capital. The common practice of renting other people’s capital to sell it short and thereby reduce its value is the snide face of capitalism that cares not for others. A link on how to avoid it may help if you were unaware your online broker was doing this with your shares.
If you are looking to buy a stock it is worth looking at how many shorts are already taken up on the stock. What follows next is a fairly useful link to shorting of shares. Most normal EPIC, tickers can be found through this site. If it runs into millions the chances are that the price is unlikely to rise in the near term very much. Link follows.
Using the upper link, compare Microsoft MSFT with its 8.38 billion shares to Thomas Cook TCG 875 million shares, and you’ll quickly see there are a greater percentage of shares rented out on TCG 80M (at time of writing) than on MSFT 40M. This means short sellers are happy to sell TCG expecting the price to fall later, when they then buy your rented share back and replace it. During that time your holding has been driven down in value, normally without your knowledge.
So allowing for these things what can you do to ensure life is better dealt with the way you would like?
Firstly, accept that there is a widespread manipulation of shares by organisations with much more capital than you. So only risk capital that you can afford to lose, or more likely see a reduction in its value in the short-term. Next take advice, but make sure the person giving the advice knows how to succeed in the stock market.
If you are going to use search to check out a company be aware that it can be manipulated, try using several search engines.
I’m going to sign off for now.
As ever, Simon Hamer