Alto Ingredients Inc (ALTO)

[Harry Winston]

Stock prices can be manipulated sometimes. There are two primary ways to do this.

1. For low-volume stocks, set up a series of buy offers (or sell offers), sometimes for moments at a time, using a computer program. These orders can push the price up or down in a manner that is unrelated to the current news about the stock and unrelated to the facts and figures that are in the last 10-Q or 10-K for that stock. This method doesn't work for long-term investors because the information in the 10-Qs and 10-Ks is more influential over a long time period.

2. High-volume stocks are sometimes succeptible to good or bad industry news or even company-specific news. During the late 1990s and early into 2000, the tires of one specific manufacturer had a lot of failires. There were some fatal accidents. The price of that company's stock dropped by a big percentage, and so did the stock prices of other tire manufacturers.

I knew that this was a company-specific problem, so I bought some stock in a different tire manufacturer a month after the problems surfaced. The price of my stock dropped a bit more, but then it bottomed out, it rose back to the level that I had bought it at, and it kept going higher when the rest of the market saw what I had seen - that this was a company-specific problem.

I eventually sold my stock for an 85% profit less than a year after I had bought it, thanks to some insights into the market forces for that stock.