All, BEWARE OF NEW DAYTRADER TACTICS: The "Subtle Basher"
There is a not so subtle tactic being used by many daytraders on RB/SI lately. I call it "subtle bashing". And it is affecting many solid and promising BB stocks, and NOT so much the micro-pennies anymore.
I am quite troubled at how many daytraders have taken the tactic of trying to scare people to sell, so they can pick up cheap shares. Sometimes it is blatant bashing and obvious (we can all spot that). But sometimes it is much more tactful. This usually involves putting a negative spin on nearly anything or everything. They may have been a great advocate of the stock (i.e. before they sold) but now "are starting to get concerned" (i.e after they have sold of course and want to pick up cheaper stock again).
OR... even more clever is to create two aliases....their subtle "basher alias" and their "loyal supporter alias". When they need to have the stock go up to make a profit, they start posting nothing but positives under their Mr. LOYAL alias. When they want to pick up cheap shares they bring out Mr. Pessimist. This keeps their credibility in tact. Keep in mind, that they often employ SUBTLE tactics.
WHAT ARE THE TACTICS?
To drive a stock down, they often over-dramatize a small problem or a minor delay or question into a major issue. It often works because those who bought a stock on a run-up and start to see their stock drift below where they bought it get very nervous. They were looking for a quick hit and run, and aren't getting satisfaction. Others have invested more money that they should have and have their expectations way too high, and get nervous when things start to crumble a bit.
Often they try to get investors to judge a stock as if it were a $10-$20 NASDAQ company and question every little thing, sometimes in a very clever, undermining way. They create, or try to create, unrealistic expectations, so that the company has to massively overachieve, so as not to dissapoint.
I use WINR as an example, because I find anyone who puts a completely negative spin or highly questions most everything, when you have a profitable company priced at $1.40 that has already suggested that Q2 earnings will be good, is laughable (especially when they say or give the impression they are long)! Certainly negatives and risks should be discussed, but in the light of the current stock price, and not compared to a company on the NASDAQ that sells for 5-10 times more.
HOW DO YOU SPOT SOMEONE EMPLOYING THESE TACTICS?
It's not easy, but anyone who admits they have sold and/or has posted negatively for a long time on a thread (i.e. anyone who has long overstayed their welcome) is a likely candidate who is playing this game. Again, they often put negative spins or overdramatize small delays or problems into big ones. They hang around and hang around, appearing to have no motive to do so.
WHY DO THEY DO IT (i.e. what is their motive)?
This is the latest ploy of many daytraders, because they can't make a living without causing either massive buying or selling. If a stock sits they can't make money. They need it to go up then down, or down then up.
IS EVERYONE WHO SELLS A STOCK AND TURNS NEGATIVE EMPLOYING THIS TACTIC?
Of course not, but again if they seem to hang around and begin putting unrealistic negative spins on your company, watch out.
WHAT ABOUT THOSE WHO PUT POSITIVE SPINS?
Yep, that happens, too, so we all have to use our best judgement. But the main point of this little expose is to make people aware that not all bashers are doing so because they are paid shills of an MM, or shorting the stock, etc. Some actually LOVE a stock and sold on a run-up and now want desperately to get back in at a much lower level if they can.
WHY DOES IT UPSET ME?
Because it is becoming a bit harder to be a long term investor these days. There should be nothing wrong with being able to find a company you really want to invest for the long term and having it trade fairly based on its performance relative to other stocks in its sector. Most traders (daytrader or not) play fair, but many others manipulate the system and prey on the fears of others. They get them to buy into runups and sell on manufactured scare tactics. It will likley never stop, but at least we can be more careful to examine the motives of each other and how some are manipulating the system.
WHY ARE THEY TARGETING THE MORE SOLID BB STOCKS?
This is occuring on some of the really solid BB stocks out there. That is what is different than before. I think the reason is that the more solid companies have a more predictable support level. For instance you know that WINR at $1.25 is a really great deal. But some little micro-penny that they know little about is too unpredictable.
It they can panic a few, then the MM's will help even more, like a couple weeks ago, when someone sold WINR at $1.21. Then they come in and buy a few thousand shares, and wait a few days, sell for a 20-25 cent gain or whatever, and they have made their weekly salary.
In short, there is nothing wrong with picking up shares when they dip (that is what many of us do) but when you try to unfairly bash a stock to acheive it, that wreaks...period!
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