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LLBO is a game changer with their product itBra, a innovative medical device that detects breast cancer. Final clinical trial about to start this month. Depending on FDA approval, potential sales by end of year to early next year in US and Europe. Cisco, Flextronics, Salesforce, and Stanford University Canary Center are involved with LLBO. This has massive potential! Please do your DD
Get in CSCE, before she explodes.
Low Floater, with licensed distribution deal in Canada. $$$ on the way.
Not discussed nor practiced enough:
Three Ways “Old Money” Hangs On to Its Riches
By Jim Rickards
http://www.internationalman.com/articles/three-ways-old-money-hangs-on-to-its-riches
While America claims to be a class-free society, the opposite often seems to be the case. Americans are obsessed with social status in all its forms whether based on celebrity, artistic or athletic accomplishment, or just plain money.
Although royalty is not legal in America, our economic royalty including Bill Gates and Warren Buffett are as highly regarded as any English duke or earl.
When it comes to status, we don’t look just at the size of one’s bank account, we make distinctions based on the nexus of money and social standing. This leads to contrasts such as “old money” and “new money” with the former connoting generations of life on country estates and Ivy League credentials while the latter is something flashier.
The Astor family have been wealthy for over 200 years and practically define old money in America.
Yet as one goes abroad, there is an even older kind of money, true dynastic wealth that has existed in some families for 300 years or longer.
This type of wealth has survived not only business cycles but also war, invasion, the collapse of empires, revolution, and natural disaster.
In order for family wealth to persist through so many centuries and through such adversity, something more is needed than ordinary investment skill.
This rare kind of success in wealth preservation requires a longer view, infused with a sense of history and a keen appreciation for worst-case scenarios that too frequently become real.
When one inquires of family members and representatives as to what it takes to preserve wealth over centuries and not just cycles, the frequent reply is “a third, a third, and a third.” This is shorthand for dividing one’s wealth into one-third land, one-third gold, and one-third fine art.
Obviously some liquidity is needed for day-to-day expenses and some room can be made for a speculative portfolio, but the basic idea that land, gold, and art outlast and outperform riskier assets such as stocks, bonds, and cash seems sound when viewed from the perspective of centuries and not just years or decades.
This may be difficult to grasp for Americans who have been badgered with mantras like “stocks for the long run” by Wall Street salesmen more concerned with their commissions than their clients. Stocks can indeed perform well for long periods.
Yet stocks, bonds, and even cash all involve some claim on a third party and therefore contain credit risk in addition to whatever market risk they embed. The investor is always at the mercy of the issuer. Companies eventually go bankrupt. Bonds eventually default.
Every paper currency in the history of the world has eventually proved worthless and there is little reason to believe the reigning paper money champions such as the dollar, euro, or yen will prove different in the fullness of time.
In contrast, the value of land, gold, and art is intrinsic. If you own it, you own it. There is no issuer who can suddenly make your land disappear or turn your gold into confetti. A painting cannot go bankrupt. Of course, it is possible that a totalitarian regime or an invading army might confiscate tangible wealth. Yet, even then there are defensive strategies that have been pursued with success.
Gold can be gathered up and stuffed in a saddlebag or sewn into the lining of a coat and moved. Art can be removed from frames, rolled up, and carried in one’s luggage. Admittedly land cannot be moved, but with good title and patience a family can reassert its claim even generations later once interlopers have been ousted.
Many Cuban families in South Florida are waiting to recover their estates seized by Castro in the late 1950s once the Communist government collapses, and they may do so with some success.
No portfolio is perfect or without risk. Yet, too often we think of risk narrowly and ignore the greatest risks of all in the form of monetary collapse, social disorder, regime change, and emergency edicts. Warren Buffett disparages gold because it has no yield.
The reason it has no yield is that is has no risk. Yield is what you earn when you take risk. Gold has no credit risk, no currency risk, no maturity risk, indeed no risk of any kind. It is just gold.
There has been similar appreciation in the value of fine art. Admittedly this is a selective example. Yet it is true that over centuries it is the hard assets not the paper assets that retain value through collapse and catastrophe.
The old money knows this — they have seen it all before.
Regards,
Jim Rickards
for International Man
WDRP - Wanderport - Canna Energy check it out. Its starting to get noticed.
Keep an eye on MDIN! One of the only real legit marijuana companies selling a legit product
Dealing with Losing Trades
Monday May 18, 2015 13:42
Posted on May 17, 2015,12:41 pm by Trader Dan
http://www.kitco.com/commentaries/2015-05-18/Dealing-with-Losing-Trades.html
One of the most important things that anyone who ventures into the arena of trading will need to learn, is how to deal with trades that go sour.
You can find lots of books out there on technical analysis in this day of age. You will also discover no shortage of self-proclaimed “experts” with infallible price predictions which are yours for the taking provided you first plop down some exorbitant sum of money for the privilege of then watching those prophecies fail to come to pass.
But what you will rarely ever come across is a book or an article dealing with the mental impact of losing your precious capital in trades that fail to work out as you thought they would.
Part of the reason for this is that those who sell their books, or newsletters, or whatever, need to keep up the façade that they are so experienced, so good, so astute, that they never lose money and if you simply follow them, neither will you.
Anyone who has been around the markets for more than a few years will immediately see this for exactly what it is, a marketing ploy devised to provide a continuing flow of new “victims” ( excuse me, I meant to say customers/clients) to replace the ones that leave once they learn through their own painful experience how fallacious such claims are.
It has been my observation that the virtue of Honesty, sadly, is something that can be a rather rare commodity when it comes to the commodity world!
The simple truth is that every single trader, no matter how good or how experienced, will go through periods during which they will seem to be unable to place a single trade which will be profitable.
They will go into a market on the long side only to have it reverse on them and drop lower. They will then go short only to have that same market turn around and go up. They will then, with some indignation I might ad, jump back on the long side once more, this time kicking themselves for “not being able to sit tight and be right”. Whereupon, that same market will then seem to slap them silly by promptly collapsing once more!
The result is that they are mercilessly whipsawed and suffer a series of losses one after the other. Any trader of any experience of any duration can relate to this, as I can assure you, it has happened to them. It certainly has happened to me!
The result can be devastating both psychologically and emotionally. Psychologically in the sense that it can completely shatter their self-confidence making them doubt that they have what it takes to be successful. Emotionally, in that it can produce a real sense of despair and anger that leads to bouts of depression.
As a brief side note here – I speak often of money management for trades but one thing all traders must cope with, and I believe that this is even more important than the money management side of a trade, is EMOTION MANAGEMENT.
Look, it seems easy to manage your emotions when your trades are successful and it seems as if you have the MIDAS touch. None of your trades fail, the markets move as if following your lead, your paper profits grow and all is well with the world.
Believe it or not, during such times there are emotions/attitudes that must be managed. Most importantly of these is PRIDE and COMPLACENCY. You wonder how other traders out there could be so incompetent and stupid compared to your own genius and marvel at how easy it is to make money in this profession. “What is the matter with these other fools”, becomes your guiding principle.
Beware, because unless you bring these under control, you are going to be setting yourself up for a very rude awakening one day. Recklessness, overconfidence, arrogance, complacency, narcissism, etc. have no place in any successful trader’s temperament. Get rid of them or the market will get rid of them for you and trust me, you will not like the manner in which it does!
When it comes to losing however, an entirely different set of emotions and attitudes must be combatted and these can be incredibly debilitating. As mentioned above, despair and anger can encompass you. You realize how long it took you to produce your trading capital, how precious it is and you see it literally evaporate in front of your eyes.
Also, your dreams, your goals, your hopes of providing a better life for yourself or your children, which at one point seemed to be on the verge of becoming reality, are suddenly, mercilessly, brutally, taken from you in a moment. That can CRUSH you emotionally and psychologically as hope becomes replaced by despair and peace becomes replaced by inner turmoil, grief and bitterness.
During such times, or better, such states of mind and emotion, the real temptation that MUST be overcome is the urge to “let me just keep putting more positions on so that once the markets turn, I can recoup my losses and score big”.
I cannot emphasize this strongly enough: NEVER DO THIS, EVER! Making a trade when you are angry, or bitter is never wise as you are not thinking clearly at that point and have completely lost what should be a guiding principle of successful trading, OBJECTIVITY. Emotions are directing your trading at that point. Stop!
So, the question becomes, “what is one to do during such times as these, when it seems as if the curse of heaven is hanging over your head?”
I will answer this by saying that there are THREE positions any trader can have in the market at any given time; LONG, SHORT or OUT. Let me repeat that last one again, OUT!
I have found that the best way to handle periods in which it seems as if you can do nothing right is to simply get out of the market and lick your wounds.
This accomplishes several things – FIRST and foremost it keeps your from losing any more of your precious capital. You cannot lose money if you are out of the market now can you?
Surgeons will tell you that the first thing they have to do with any patient that has suffered serious wounds is to STOP the BLEEDING.
After that is accomplished then you can treat the patient.
SECONDLY, it then gives you the opportunity to actually LEARN from what went wrong. Traders who never learn from their mistakes become FORMER traders. Those that do, become successful traders. Any trade, even if it goes sour, can be a valuable learning experience that teaches you how to avoid major mistakes in the future. I would go so far as to say that had I not had a large number of failing trades in my early career, I would not have become successful at doing this today. Every time I lost money I tried my best to see what I had done wrong so I could avoid repeating it.
On some occasions you will find that you actually did nothing wrong. You got a buy or a sell signal, you acted on it and the market simply did not cooperate. Guess what? There was nothing you could have done any differently at such times. A piece of news came out and it changed the complexion of that market and it reversed course. That is simply the nature of this profession.
Most of the time however you will find something that you could have done otherwise if you had to do it over again. Sometimes, that might have meant avoiding taking the trade in the first place BECAUSE THAT MARKET HAD NO CLEARLY DEFINED TRADING PATTERN. Essentially you were rolling the dice.
Other times you might have gotten too greedy and failed to take some of your paper profits off when the market was showing some signs of stalling.
Sometimes you might have put on a position that was simply too large for the size of your account and a brief pause or setback in the market, that was temporarily moving against you, resulted in too big a drawdown in your trading account and caused you to panic and act prematurely instead of sitting tight.
There are a host of things you might discover if you take the time to try to glean something of value from a trade gone bad.
THIRD and lastly, being out of a market allows you to regain your objectivity. When you have a position on in a market, at that time, you are committed to one side. It is human nature to therefore want to see those things that confirm your view of that market and ignore those things that do not. If a market is flashing warning signs that it is running out of upside momentum and you are long because you have a fundamental view or a strongly held opinion that prices should be much higher, chances are you are going to ignore those warning signs. Same thing goes for a market headed lower in which you think prices should fall even further = you will tend to ignore signs of bottoming action.
If you are out of that market, you will be surprised how easy it becomes to both read and give an objective view of that market. Once you regain your objectivity, then, and only then, are you ready to re-enter trades.
Also, by observing a market and watching its price action and seeing that price action confirm your views, you will regain your confidence which might have been badly shattered. That will bring a sense of peace and internal equilibrium which will make you realize that you can indeed do this and that you are not some sort of miserable failure but merely a fallible human being who can be tripped up from time to time. This produces that most important of trader’s attitudes and one that I believe is the most underestimated and yet the most essential for ultimately being successful – HUMILITY!
Once you realize that you are not infallible and that you can err from time to time, you will become more cautious knowing when to push and when to back off the throttle and lighten up. No book can teach you this. You must learn it through experience.
I might add this is the reason that as soon as I see someone making wild claims about where a market is going as if they are infallible, I immediately know that they either have little if any actual experience trading in the real world or what might be even worse, they have never learned humility.
This topic is far more complex than can be dealt with in this short venue but I do hope that some of this is of some comfort to those of you readers who might be struggling with these things. Fear not! You are dealing with those things which every successful trader who has ever gone before you has had to contend with. Keep persevering and you will succeed but be wise about it!
Good trading to you all!
Dan Norcini
http://www.traderdan.com
Go check out DIRV it was up
U.S. Department of Justice Announces a Multi-Million Dollar Program to Begin Equipping Police Departments with Body Cameras as Wireless Video Technology Make Notable Advancements http://www.cnbc.com/id/102674896
Better go check SHOM.news yesterday.very thin.going to get exciting!!!!!
PVSP 10k released and is now current
$PVSP up 300% and steadily climbing since this post. Last chance to get in before the real jump happens.
If you're in the mood......
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PVSP still going strong. Up another 20% before a 10 k drop at any moment.
Cat stock blazing hot Buy $80 sell $110. $andman
Check out $PVSP & $ VMGI on most read board
Anyone checked out NESI reversed merger news with illegal burger company looks good
Take a look at EQUR on OTCQB. Ammouncements will follow
Me too and go for Big :) NOT going home :) sorry on mdin Board I have only 2 posts a day.. Be sure after we put mdin in pennyland .. I will be with you sincerely for all the next future stocks you will play, you seem to be the whale I like to be with lol hard to find some real whale like I can be too lol I was talking about mgon stock early, it was crazy, I slapped hard but someone did hugely and we did burn those shorts who were all day long here to bash lol but forgot to cover lol to busy to bash lol , anyway happy to have you in mdin and I feel some gonna regret lol take care buddy and if you have a Twitter account send me in pm :) I will be happy to follow you take care :) and all ready follow you here on ihub :) you seem to enjoy burning shorts, we got something in common hahahaha
$PVSP top 5 on most read for 3+ weeks
$LIGA 159M volume on Thursday, with 0002s running out, this ticker is set to go!!!
I own MDIN millions upon millions of shares
I go big or go home
LIBE = 10 bagger from here mark my words
Can't wait to see where oxis goes it's looking like a good run is upon us.
LVGI Setting up for a nice run. Do a little DD and see. Your welcome
KEEP AN EYE OUT ON ALKM HUGE COMPANY WITH A SUB PENNY PRICE LOOK UP ALKAME WATER ON AMAZON ALL 5 STARS!!!NO OTHER WATER COMPANY IS DOING WHAT THEY ARE DOING IF YOU DONT BELIEVE ME ABOUT IT LOOK HERE
http://www.amazon.com/Alkame-Water-16-9-Fluid-Ounce/dp/B00HSPMZRG
37 reviews all 5 stars
PVSP: + % 50 . 8k and 13g both released in one day. Insane!
$ALGA American Seed & Oil Co. and @DubeHempShot Expanded Sales News Out: http://t.co/ZElZJzuvBl http://t.co/76pvCn19GB
CSCE has gone current after years of dormancy. Reverse Merger w/ Nano Tech West. 53 million float! More news to come in the weeks ahead.
$PVSP resetting after early boom! Get in before it tries to get back to its 52-week high!
CSCE: 160 Mil O/S. 26 Mil Float.
News/Events ahead:
1. Attorney Letter to go to current and remove the buyer beware.
2. Finra approval for RS.
3. RS and completion of merger.
4. News and updates.
5. Uplisting of stock to OTCQB in 30 days from day the RS is done.
CEO says, stock will be $1+ by the end of the year. Great long term investment.
Good Morning Traders check out EGOH huge vol. yesterday ready for a run today!! Happy Trading Everyone
$PVSP accumulation looking prime. Resistance broken today. ? going up!
$VGTL rising in up into breakout mode.
LGBI - I have accumulated a massive holding.
I believe management will deliver. Accumulate and go long with us.
BWMG reinstated and now there is this. Company has revenues!
http://www.browniesmarinegroup.com/quarterly-results-from-brownies-marine-group-bwmg-show-consistent-improvements/
A means of exchange and a measure of value. Aside from water and oxygen, it is, in the practical sense, the pre-requisite of life. People kill for it.
This board is designed to keep from 'getting killed', for what of it (money) you may have. Understanding the very basics is crucial to survival. This board will only take 3 minutes to read, but can save you many thousands of dollars, sleepless nights, beatings bestowed upon yourself....maybe even your LIFE (people do jump out of windows after heavy losses)! (not LOL!!!)
Please read carefully and closely.
Key word: if
http://www.investorshub.com/boards/read_msg.asp?message_id=16097725
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First things, first!
#1). You have money. Other people want it. All of it!
#2). You want easy money. So does everybody else. They'll get it, too....yours! (and all of it!)
#3). You tell yourself you're smart. You won't lose your money. Fact: Other people are smarter, and they'll still get your money (and all of it!).
#4). People KILL for money. Lying to you, for yours, is cakework. Don't let your money be the icing on someone else's cake.
#5). Re-read the first four caveats again! Read them so many times, you can recite them while passed out drunk! They are THAT important!
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So, you have a few dollars and want to 'make your money work for you'. Good. Realize you are not alone, and obviously, not everyone makes money in the stock market (atleast not all the time). Will you be who I make money from? Hopefully not. Will I be who YOU make money from? Not likely, unless you learn the basics first.
In the stock market, there are five basic 'thieves' who'll steal your money right from in front of you, 6 that'll leave you broke for sure:
Dilution (the selling of new shares by the company)
Manipulation (primarily performed by the Market Makers, but not entirely)
Paid Promotions (biased professional attempts to encourage buying of an issue)
False Presentation/Representation (fluff PR, outlandish projections and claims, etc.)
Pump & Dump (usually associated with excited promises of major gains. Cousin to Paid Promotions and False Presentation/Representation)
Short Selling, Naked Shorting Selling (NSS) (the act of selling borrowed shares first, then buying back later, hopefully and usually at a lower pps. NSS is the act of selling shares that have never even been borrowed, ie; air-shares)
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Dilution:
The selling of newly issued shares. The basis in which the entire stock market revolves around is the issuance of shares to acquire the capital to sustain and allow a company to grow. This is arguably the worst of the first 5 'thieves', as it is 100% legal, even when done with 'less than good' intentions and done thru mis-representation. The less 'blue chip' a company is, the more likely the dilution will not bear fruit. Pinksheet stocks are the least 'bluechip' and the most likely to never truly 'bear fruit', even though many people very profitably 'play the scam'.
Enter the 'lifestyle' stock.
Lifestyle stocks (and they are VERY plenty, especially in Pinksheet issues) are stocks with good/great sounding stories, usually in the form of press releases. First and foremost, they provide CEO's with high salaries, regardless of CEO performance. They also provide the company with capital to support their own lives, using such guises as travel, meals, and entertainment as expenses. Automotive (BMW, Mercedes...you get the idea) expenses are common. Real-estate also falls into the classification as a company neccessity, 'stated' as a necessity for temporary housing for out-of-town clients, even if the 'client' may be a high school sweetheart from a different city. Shortly put, watch CAREFULLY and CLOSELY for lifestyle stocks. You can only profit from them once you are FULLY knowledgeable in their 'scam'.
Dilution is inevitable in all companies, given it's nature and value to a company. A 'good' company dilutes minimally/responsibly, and gives shareholders 'value for their money', ie; increasing/improving bottom line fundamentals. Virtually nothing is wrong with 'accretive dilution'.
It is HIGHLY advised to locate the Transfer Agent (TA) of any company you wish to be invested in for more than 1 week. By frequently calling the TA, you can gain a neccessary understanding to what extent the company is diluting. TAs can give you the outstanding shares (o/s) for any date you ask. By knowing the o/s on the first of the last 3 months, gives a good idea of dilution rate.
Stay far away from an issue that the TA has been gagged, atleast until you have become VERY experienced in investing/trading. There is virtually NO good reason for a TA to be gagged. None.
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Manipulation:
This is a device used more by Market Makers (MMs) than others, but by no means, limited to them alone.
MMs rank right behind bankers, lawyers, politicians, and many CEOs.
They (MMs) have the ability to create what appears to be volume and increase in pps (price per share), giving the false impression that a stock is going up in value. What is to be closely watched for is whether it is a sustained increase in pps, or only temporary.
They (MMs) have the ability to 'over accentuate' a 'run', giving the impression the issue is going up quickly. Often, they will naked short shares at the HOD (high of day) only to buy them back (from you) on the retrace, when you sell out of panic, fear, and/or doubt. They understand terms like 'weak hands', 'panic', 'fear', doubt, etc., and have no qualms of using their 'skills' to make themselves more money at your expense.
No one makes more money in the stock market, than MMs. Usually, it's YOUR money, that they make!
MMs have an arsenal of tricks they use, of which would be impossible to outline them all. Other common ones are signals. Often, they will use 100 share trades to take a pps up or down, depending on what their desire is. If they have shares they want to sell, they will try to 'take it up', giving the appearance of a pps going up in value. Conversely, when they need shares, they 'take the pps down', on 100 share trades, hoping to 'shake weak hands' loose of their shares with the fear of a plumetting pps.
Another form of manipulation is performed by unscrupulous investors or investment bankers, usually by 'bidwhacking' a pps down, so as to buy more shares at lower prices, whether on the open market or thru private placements. (A private placement is when a company sells shares directly to an investor, as opposed to the open market, and usually at a deep discount. PPs are not advised, as they usually tie up funds for a period of time, and meanwhile, the company's stock price can be diluted down below what the PP sold at/for. In other words, stay away from PPs when offered to you, unless you are VERY aware of ALL of the company's dynamics/fundamentals).
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Paid Promotions:
Newsletters, Spam, Advertising- all forms intended to put the company in a positive light, regardless whether the company is worth the paper they are printing new shares on, or not. Paid promo NEVER tells bad things, natch. Also, since they are often paid with free trading (as opposed to restricted) company shares, these new company shares are often dumped quickly, thereby driving the pps down unless enough market demand can soak them up. Excercise extreme caution when interested in an issue you learned about, by way of these forms of media.
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False Presentation/Representation:
Volumes could be written on this, as this is the greatest method of selling shares, and often, new shares. Mis-representation occurs by both- company and shareholders ('pump and dump' (P&D) 'artists'.
Companies are famous for outlandish projections, giving investors hopes of great rewards. Usually, it is better to put these companies on the watchlist, as opposed to buying because of projections. 'Show me the money' applies in full.
Shareholders are also famous for misrepresentation, sometimes even, so they can close out on a losing position at a half way decent pps....and at your expense.
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Pump & Dump:
Many stockboards are loaded with fellow investors who are anxious to see their investments go up in value. Everybody wants you to buy into the same company as they, themselves. Even I do. Choosing good stocks however, should never be done on the grounds of what people 'say', or what you 'heard' (atleast not until they've proved themselves). Nothing will ever replace DD (due dilligence). It's YOUR money. If you don't invest it wisely, it might end up being MY money. (j/k)
The typical 'pump & dumper' is a person who frontloads (buys in advance), then alerts with great excitedness about "MAJOR GAINS!!!", or "Ready to blast off", or "To da Moon", or "900lb Gorilla on steroids". Anyone who uses these ploys should be highly suspect and also frowned upon.
Intelligent investors invest intelligently, and make money. Those who fall for P&D hype deserve to lose their investments, when the 'pumper', quickly turns to 'dumper', selling you the shares he just made 50%, 100%, or 1000% on!
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Short Selling, Naked Short Selling (NSS):
Short selling is done with actual shares that legally exist in certificate. This practise is usually done when a stock is considered overvalued, and a 'short' expects the pps (price per share) to decline. The short is borrowing someone's shares (possibly even yours) at whatever price, from a broker who has such shares, sells them to the market, and after the price has declined, the Short(er) buys them back (covers), pays the broker back, and keeps the excess, as profit.
Naked Short Selling (NSS) is done with shares that do NOT exist, in no form whatsoever, and is done only by Market Makers (MMs), brokers/dealers (B/D), some brokerage firms (E-trade, Scottrade, Ameritrade for example), and sometimes, overseas investors who have brokers that do not abide by SEC laws and regulations. NSS is very comparable to counterfeiting, except without the need to even have printers. Because naked shorted shares do not exist in any form whatsoever, they cannot even be traced by the SEC. It is also a form of dilution, and in the broadest sense, compounded dilution at it's worst, and furthermore, not even on anyone's books.
Naked short selling was created (by the SEC, no less) to allow MMs to 'maintain an orderly market', though it's intention has been ridiculously abused (by MMs) to the point of criminality. Worse yet, due to 'loopholes' in the laws that MMs are able to circumvent, rarely does prosecution/penalties ever occur.
*Note: This is only a brief outline of NSS, as is much of the rest of the information on this board. Nonetheless, all that is discussed here is to bring general awareness to the 'machinery' of the marketplace.
More on Market Makers: http://www.investorshub.com/boards/read_msg.asp?message_id=15625415
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Naked Short Reform petition form:
It's your money. Once you've lost some of it to the MMs, you might be more receptive and/or disposed to completing this form and sending it in.
http://www.petitiononline.com/mrktrfrm/petition.html
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Summary (to the above):
It would be well advised to refer to the 'first things first', after 2-3 weeks, if you haven't already memorized them. They are THAT important! (Don't wanna memorize them? Ok...it's your money. People will be more than happy to relieve you of it!)
It may do well to refer to the 4-5 'thieves' section every few weeks, for 1). to see how much you've recognized them as they happen, and 2). to remind yourself how many various ways 'thieves' can 'pick your pockets'.
After all that you have thus read so far, have you been scared hell out of investing yet? You should be! Consider the consequences of hasty moves. Walk on eggshells if you must. Better to learn by slow trial, than to jump headfirst into the fire.
Always do your own DD.
Now, for more in-depth basics.
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Diversification (application of interest in several/many sectors/industries)
Tantamount to intelligent and successful investing/trading, diversification is more than just advised by all of the most seasoned professional investors/traders. It is common sense.
Often, newcomers will buy solely of one issue due to a strong recommendation, or a 'love for the story'. RARELY is this wise to do. RARELY! Double RARELY!!
WHY?
Compare it to your high school sweetheart. In truth, how many people are still married AND happily, to the first 'love of their life'? Few! Very, Very few!
It is VERY common that inexperienced investors feel so confident in their one single fully invested position (much like their first 'high school sweetheart'), that they tend to overlook all the thousands of other 'fish in the sea', many of which, chances are, are even better choices, since it can easily be proven that seldom does a new investor just happen to, by some grace of God, stumble across the perfect investment (if there is such a thing), the first time around.
Your first stock(s) should certainly be treated no differently (much less, better) than your first sweetheart. Love them, learn from them, but move on, especially if they are not truly 'treating you kindly' (making you money)! Set yourself free and test the waters. If after time, you are still fond of it/him/her, then go back. Even then, in the stock market, no stock will feel 'cheated on', if you take up more than one 'favorite'.
Put simply, never marry a stock. If you find you have only one open position, you are married, and money is the leading cause of divorce, often leaving you 'cutting your losses' to save your life.
Diversification CANNOT be overemphasized! Not one single, active, experienced investor does not have atleast 3 open positions at any one time. Many have much more than just three, and usually all in various sectors. This, because one sector may experience a bad day, for whatever reason, while another may experience a good day, for whatever reason. Diversification is 'hedging yout bets' in the broadest sense.
(All too often, I see newer investors who are in only one stock, and have their entire investable funds placed there. No one do I wish to reach out more to, and ring their necks, slap them silly, and beat some sense into their heads!!!) LOL
(It should be said however, that occassionally, I myself find an issue (stock) with such strong fundamentals and potentials, that I will temporarily 'go all in', again only temporarily (days, a week, or two, at most).
OK...next basic....
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A curious misconception exists, in the stock market: for every person who makes money, there is someone who loses it. Though this is true in every play where 'thieves' exist, it is simply NOT true, where strong fundamentals exist.
Occassionally, a company will have a 'fundamentally improving' development, in which the whole company itself, increases in value, and sustains this increase. These are the ONLY plays where the majority of shareholders benefit from. These 'fundamentally improving' developments often cause a 'hysteria' however (much of it due to 'pump'), causing the pps to rise beyond proportion to the development. Buyers at levels above what the development is worth, lose out when fair market value (Fibonacci retracement/consolidation) begins to set it.
For this reason, bottom plays are the preferred, as the potential for losses are considerably lower.
(Also, 'value stocks' are those which have strong fundamentals. Such qualities that make for strong fundamentals are: A CEO with a good/great track record; low dilution rates; low o/s; low debt; no private placements, convertible debentures, financing, etc.; valuable assets; insider ownership, to name a few.)
Always be wary, when entering a play that has already moved too much, too soon. Profit takers sell without a moment's notice, often leaving you a bagholder. This is most evident when you see someone 'pumping' a stock one minute, and the next minute, it appears they never heard of the stock. This is the ever so famous 'pump and dump' (P&D).
(My apologies if I repeat this (about P&D), as you will find it occurring repeatedly in the marketplace anyhow, and you should atleast be well informed of it's frequency).
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Stock Exchanges (in descending order of general market appeal/acceptance)
NYSE (New York Stock Exchange):
Creme De La Creme. Choice of the rich and famous. Blue chip. Generally considered the safest stocks, though giving the lowest rate of return, on average. Aside from their 'lowest risk factor', NYSE/blue chip stocks are favored for the dividends they pay, quarterly/yearly.
NASDAQ (National Association of Securities Dealers Automated Quotations):
NASDAQ stocks are, sometimes, companies that have moved up from the OTCBB or AMEX. Some NASDAQ stocks IPO'd directly onto this exchange. Others have came down from the stringent requirements of the NYSE, while others strive FOR the stringent respect of the NYSE (bluechip has it's rewards). NASDAQ stocks usually begin at a minimum of $5.00, and some pay dividends, also. If they fall below $5.00 for a sustained period of time, they risk being dropped to the AMEX or OTCBB.
AMEX (American Stock Exchange):
Upgrade from OTCBB, downgrade from NASDAQ. Typically, AMEX stocks trade between $2-$5 (atleast to begin with). Most institutional buying will not begin to occur until a company has atleast reached this level of 'clout'. Dividends are seldom, but more likely than OTCBB.
OTCBB (Over-The-Counter Bulletin Board):
The lowest status of all U.S. national exchanges. Only requirement for OTC listing is fully reporting w/financial statements, ie; transparancy in accounting. OTCBB companies are the preferred penny stocks since atleast they reveal what they are spending investor money on. Thru financials and filings, you can usually gain an idea of the company's history.
Grey/Pinksheets (ohhh, brother! where do I start with this one?) LOL
Most commonly called 'pinkies', Pinksheet stocks are without a doubt, the highest risk stocks tradable. So risky are they, the newcomer might as well just hand his money over to a mugger (atleast he got to keep his life in exchange!) NEWCOMERS are HIGHLY advised to play them ONLY after obtaining 'Level 2 for Pinksheets', which costs approx. $42 p/mo thru http://www.Alphatrade.com
Pinksheets are, first and foremost, the domain of MMs, where Master Manipulation is rule of the day. If/when starting out in pinkies, plan to lose your money, first. NEVER NEVER NEVER invest more than you can afford to entirely lose. At any given moment, a CEO can be thrown in jail, and all trading ceases. At any given moment, the CEO can move to Mexico/Canada/South Pacific, and all trading ceases. With VERY little notice, a reverse split can be announced, and your dollars will have just shrank. These are a few caveats to pinkies.
On the other side of the coin, the greatest profits of all tradable issues can be made in Pinksheets. In the stock market, the greater the risk, the potentially greater the gain. No place is that more true than in Pinksheet stocks. Those that have made bundles on them, love them (it's a love/hate affair), those who have lost much money on them, hate them (strictly hate affair).
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Trading Styles and Techiques:
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Understanding share structures and market cap:
All publicly traded companies apply for and are given an 'Authorized' amount of shares in which they can use to raise capital. This is usually called the 'a/s'.
The shares that a company has issued to date is known as the 'outstanding shares'. All issued shares, whether free-trading, retricted, escrowed, etc., are part of the 'o/s'.
The 'float' is the amount of free trading shares that are 'floating around'.
Restricted shares are not part of the float, but can be, as soon as restrictions come off. Most commonly, restricted shares are issued for 1 yr.
Depending on restrictions, all or part may be tradable after one year. All become free trading after 2 years.
It may do well to know restriction dates and details, as sometimes, when the restriction is lifted, the selling begins, the float grows, and the pps drops (atleast for a short period of time) while the selling is being done.
Preferred shares are usually held by management, and have a conversion rate of xxx amount of common shares for each preferred share.
When investing long term in any company, it will CERTAINLY do well to know all about their restricted and preferred shares, as these can be very comparable to 'monsters hiding in dark places'.
Market Cap is the total o/s multiplied by the current pps.
Example: XYZ company has 10M shares issued and outstanding. Current pps is .112. Market cap is $1.12M.
Market cap is used to determine what value the market (you and I) place on the company and all assets, including patents, rights, logos, branding, etc.
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Reverse splits (r/s):
Very rarely are r/s profitable. They are most commonly done by companies that have maxed out their a/s, yet still need more funds for ongoing operations/lifestyles.
It is advised to VERY selectively invest (Long) in a r/s, as many companies tend to repeat history.
The link below can be instrumental in learning what companies have r/s, and how many times they have.
http://www.investorshub.com/boards/board.asp?board_id=3017
Reverse mergers, on the other hand, can be profitable plays to jump into, if entered early on. Reverse mergers are often done to consolidate two companies, giving the private company of the two, the opportunity to become publicly traded, and making the bottom line better for the original company.
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Entry/Exit Strategies and Disciplines:
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About Kool-Aid:
Kool-Aid is the 'drink' by which investors lose their money, much like the drink that Jim Jones 'followers' lost their lives. It is prevalent with stocks having great 'stories' but lacking in strong fundamentals. Investors that get 'drunk' on the 'words of the CEO' are the most common of all Kool-aid drinkers. Often though, naive investors will become 'drunk' by other followers of same issue. As the old saying goes, misery loves company, and where 'faith' has caused a group of investors to hold their stock longer than sensibility would dictate (and usually holding a loss), they become known as kool-aid drinkers.
More could be said on this subject, but the gist of it has hereby been explained.
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You have just read the basics. I wish you great success. With prudence, you can find trading/investing a most rewarding sideline or even profession.
Points to remember:
1). Greed kills, and pigs get slaughtered.
Greed is unrecognizable until 'after the fact', which is usually too late. It generally comes in the form of buying too much, too soon, and especially, of only one stock. This is why diversification is so valuable. It prevents you from taking too much loss in any one issue, in the event your choice becomes ugly. Diversification also benefits you by 'adding to the excitement' of stock investing/trading.
Also in addition, diversification helps to prevent drinking kool-aid. It allows the investor to 'open their minds' to other possibities.
One advised way to avoid the trappings of greed is to practice discipline and moderation. When you see a stock you like, only buy a 'starter' position. This will automatically cause you to research deeper. If you continue to like what you learn, add to your position accordingly. Moderation is key.
2). Seldom is anything as it appears.
If everything were as it appears, EVERYONE would make money in the stock market! Unfortunately......NOT!
The old saying is, "The truth always hurts", which is why finding it in the stock market, is so hard to do. Few companies could survive if 100% of the truth were known.
3). If it sounds too good to be true, it usually/probably is.
The better it 'sounds', the more likely you will lose money. The only times it will come even close to being 'too good to be true' is when you have stumbled across a hidden gem that virtually almost no one else has, and this would be because the market's attention has drifted away from that sector/industry, causing the stock to get 'beaten down' from loss/lack of interest. Never buy on what 'sounds' good, buy only what can be proven to be good, and yes, there are many excellent hidden gems, just waiting to be rediscovered and have life breathed back into them.
Ask questions if you are not sure.
Though no one can 'hold your hand' thru all your investments, many are willing to help 'walk you thru them', atleast to some extent. Ever since a boy, after getting a boot up my butt, I learned it is better to ask a stupid question, than to make a stupid mistake! The one might cost a little pride, while the other can cost thousands of $$. Let pride go before destruction.
and 5). A profit NOT gained, hurts less than losses SUSTAINED!
Take your time, in the beginning, for haste makes waste, and a fool and his money are soon parted!
Good luck and may God (in whatever form you believe) be with you!
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Occassionally, IHubbers will write some very insightful things. This column will present some of them, for the reader's educatonal and financial benefit:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=30835203
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MrBigz Column
Chart Lesson Videos by MrBigz - Lesson One (The Basics)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=72836576
MACD by MrBigz:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=72865413
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How to post Charts, L2 Snapshots, Youtube videos, and photos on IHub
(instructed by Chasing Stars)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68065994
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Links to the Best of the Best
IHub Boards:
Investor Help Board:
http://www.investorshub.com/boards/board.asp?board_id=6798
The Question and Answer Board:
http://www.investorshub.com/boards/board.asp?board_id=504
Technical Analysis (TA) Board:
http://www.investorshub.com/boards/board.asp?board_id=7882
Sharing Knowledge in Smallcaps Board:
http://www.investorshub.com/boards/board.asp?board_id=865
Stocks 4 Kids Board:
http://www.investorshub.com/boards/board.asp?board_id=6480
EZ Trader's Forum:
http://www.investorshub.com/boards/board.asp?board_id=1971
A.I.M. User's board:
http://www.investorshub.com/boards/board.asp?board_id=949
Seasonality Stock Report Board:
http://www.investorshub.com/boards/board.asp?board_id=1616
Value MicroCap Stocks Board:
http://www.investorshub.com/boards/board.asp?board_id=3251
Early Bird Specials Board:
http://www.investorshub.com/boards/board.asp?board_id=2761
Dream's Platinum Penny Picks Board:
http://www.investorshub.com/boards/board.asp?board_id=4818
Fringe's Paradigm Shift:
http://www.investorshub.com/boards/board.asp?board_id=4360
Subs to a Buck Board:
http://www.investorshub.com/boards/board.asp?board_id=1505
The Golden Lists Board:
http://www.investorshub.com/boards/board.asp?board_id=94
White Lightning Board:
http://www.investorshub.com/boards/board.asp?board_id=3013
Magic Board:
http://www.investorshub.com/boards/board.asp?board_id=3267
Music Board:
http://www.investorshub.com/boards/board.asp?board_id=2584
Breaking News- Stock Related
http://www.investorshub.com/boards/board.asp?board_id=1508
Taxes Board:
http://www.investorshub.com/boards/board.asp?board_id=4597
Naked Shorting...MUST READ!
http://www.investorshub.com/boards/board.asp?board_id=7636
No Quarter for Corruption board:
http://www.investorshub.com/boards/board.asp?board_id=3319
Financial Advisor's College Class (FACC)
http://www.investorshub.com/boards/board.asp?board_id=2767
Insightful Posts:
Types of Trading (a must-read for new investors):
http://www.investorshub.com/boards/read_msg.asp?message_id=15814093
Daytrading Mistakes:
http://www.investorshub.com/boards/read_msg.asp?message_id=15814123
On Chatboard dynamics - a must read!
http://www.investorshub.com/boards/read_msg.asp?message_id=15686855
Scam Stocks Checklist:
http://www.investorshub.com/boards/read_msg_ig.asp?message_id=14928266
The Bandwagon Theory:
http://www.investorshub.com/boards/read_msg.asp?message_id=2595337
On Dividends:
http://www.investorshub.com/boards/read_msg.asp?message_id=15592944
On Market Makers: A Market Maker (MM) speaks out:
http://www.investorshub.com/boards/read_msg.asp?message_id=15625415
On Discipline, by chartinator:
http://www.investorshub.com/boards/read_msg.asp?message_id=15682922
Helpful Websites:
Is your company's insiders buying or selling their own shares?
http://www.insidercow.com
How to post charts & images, bold, underline, or italicize text:
http://www.investorshub.com/boards/faqh2post.asp
Free delayed L2 quotes here - Including Pinkies
http://www.allstocks.com/html/free_level_2_pink_sheet_stock_.html
Steve1's other tax site:
http://www.fairmark.com/capgain/index.htm
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The invaluable full collection of fyi posts by Stock Lobster:
Explanation of 8K filings:
http://www.investorshub.com/boards/read_msg.asp?message_id=15898888
Intro to Candlestick Charting:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15898774&txt2find=fyi
How to Read a Detailed Stock Quote Table:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15898734&txt2find=fyi
Introduction to Level II:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15898672&txt2find=fyi
Explore Level II:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15898720&txt2find=fyi
Worst Things said by New Investors:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15896567&txt2find=fyi
10 Trading Rules to Follow - The Zen of Trading:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15896531&txt2find=fyi
On Bankruptcy Stocks:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15824458&txt2find=fyi
Common Day Trading Mistakes:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15814123&txt2find=fyi
Types of Trading:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15814093&txt2find=fyi
On what a REGDEX is:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15736819&txt2find=fyi
On Bull Flag Patterns:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15723041&txt2find=fyi
Explanation of the Golden Cross:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15722619&txt2find=fyi
SEC charges hedge fund over shorting:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15716368&txt2find=fyi
Many Pinksheets are meant to be destroyed:
http://www.investorshub.com/boards/read_msg.asp?Message_id=14931833&txt2find=fyi
Death Spiral Convertible/Financing:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15709518&txt2find=fyi
Basic Intro to 'PIPE' funding:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15709476&txt2find=fyi
Insider Trading Linked to PIPE Offerings:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15716330&txt2find=fyi
Private Investment in Public Equity - PIPE:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15709447&txt2find=fyi
Structured PIPE Transactions Take Hold as Convertibles Deemed Risky:
http://www.investorshub.com/boards/read_msg.asp?Message_id=15709419&txt2find=fyi
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Suggested Books and/or other reading/researching materials and techniques:
General Day Trading Books:
The Complete Trading For A Living by Dr. Alexander Elder:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29873751
Entries & Exits Visits to Sixteen Trading Rooms by Dr. Alexander Elder:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29873814
The Market Maker's Edge by Josh Lukeman:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29873890
Common Stocks and Uncommon Profits by Philip A. Fisher:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29873972
Recommend ALL 3 Peter Lynch Books:
***Learn to Earn: A Beginner's Guide to the Basics of Investing and Business.
***Beating the Street.
***One Up On Wall Street- How To Use What You Already Know To Make Money In The Market.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29874144
ProOnline Traders DVD - Learn To Trade Like A Pro:
http://www.tradersnation.com/proonline.shtml
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Common acronyms used on IHub:
MMs -Market Makers
iBox -information box (where you are reading this text, right now)
NSS -naked short selling
O&G -oil and gas
NG -natural gas
b/a - bid/ask
pps - price per share
sp - share price
SH - stock/shareholder
The Acronym Place:
http://www.investorshub.com/boards/board.asp?board_id=5827
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ATTENTION: This board is not intended for the discussion of ANY individual stocks. The mere mention of any particular stock may be immediately deleted, if used other than as an example!
Thank you for your understanding and co-operation.
God bless all who have taken the time to read this, and may good fortune be with you!
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