Replies to post #108225 on Biotech Values

[DragonBits]

Vinny, I realize you are being sarcastic, but there is some truth in what you post.

I find it fascinating that individuals actually create tops and bottoms in stocks, there is no magic TA to determine a price that a stock will top or bottom.

I have seen it where a small stock is on a big move up, I think it's overvalued, and I sell say 30,000 shares at some price I think is near the peak. Sure enough, it was the peak, becuase I actually created the top because of my selling at that point. Not some magical TA voodoo.

Or say MNTA, if someone put in a sell order for 2 million shares between 26.20 and 25.50, then that order creates the top. I am guessing a 2 million sharse order to sell at those prices would be more than the market could absorb. So one person can easily create a top or a bottom in a stock. The top or bottom will be long lasting assuming valuations supported the choice.

The market isn't an infinite supply of money (unless you are the FED), at some point too many sellers causes a top regardless of the value of a company.

And there is always a limited number of shares to be sold. So it the same for a bottom, if someone puts in a big enough order to buy, the stock can't go any lower, they create the bottom.

Traders study how much money mutual funds have for these very reasons.

In 2009 IMO it was best to buy blue chip companies with stable balance sheets, they were going to survive no matter what. If the Gov hadn't stepped in, we could well have seen Dow 4000 or lower, so it wasn't really obvious we were at the bottom. If memory serves, MNTA never got ridiculous cheap in the big bear, like below 5.00 or something, I suspect because a lot of the selling was by investment banks, mutual funds and hedge funds, and they owned a lot of blue chip companies they were forced to sell.

BTW, there is always some semi-crappy company that really goes to extremes. Not a pure smoke and mirrors company, just one with not great fundamentals, not terrible, just not great, but a sexy product. In 2001 it was SONS, it went to 10 cents and in the recovery they went to 10.00, and this time someone mentioned SIRI, where it went to 11 cents and now it's 1.53. I didn't buy either one, I don't care for SIRI, in fact I tried to short it when it was around 9.00, for some reason despite the huge float I couldn't get a stock loan to short it with.