Geoffrey - - >I never seem to do well with these companies that have a story of how their technology is on the verge of being accepted on a wider basis and doing great things. This particular company is very good at putting out releases that sound as though things are just falling in place to get good results, with such phrases as "gaining traction," estimating potential markets in the billions, and so on.<
Despite your lament, and it is undeniable, some new-tech companies do provide stellar investments. So, the question is, how does an investor best recognize a strong, fact-based story from a weak or false one? The answer, in general terms, is stupidly “simple”: deeply understand the company, the technology/products, and the markets for the products. That is: employ truly fundamental analysis, to the max! But, the obvious flaw in that “simple” approach is that it is typically difficult to accomplish! I argue, however, even a far from perfect attempt to employ it is far better than to employ the usual so-called “technical” stock analysis that so utterly dominates stock trading -- that is, analysis by chart reading and other “algorithmic” rules and procedures.
The domination of stock trading by way of “technical analysis” has reached, IMO, utterly insane levels by the practice of placing computers on the floors of stock exchanges, where they can carry out bids, offers, and trades at speeds that absolutely deny equal information access to entities outside the locations of the given exchange (the operating speeds are so great the quotes can be made and cancelled before the information can possibly leave the well-guarded stock exchange premises, or nearby! (Information travel, by ANY means is fundamentally, absolutely limited to being no faster than the speed of light – about 1 foot per nanosecond, 1000 feet per microsecond. Since a sell or buy (bid, match-up and trade) can be consummated, at an exchange, in less than 100 microseconds (and continually getting faster!) , the concept of everyone having access to “best” offers and the resulting trading activity worldwide (or even within a given large city) is profoundly silly! This extreme form of HFT now dominates all trading – has grown to be estimated as about 90% OF ALL TRADING! So, I say stock “trading” is so thoroughly rigged as to be a fool’s game -- unless you own a high-speed, computerized robot to employ sophisticated algorithms and buy a space for it at an exchange! (The exchanges no longer have crowds of humans yelling trading intentions – quietly humming “Algobots”, instead, competing with one another and doing a great percentage of all trading). (Algobot is my made-up word to describe these automatons –algorithmic-robots – to emphasize that they do not think, just employ algorithms, and actually themselves make the trading decisions).
How can “outside” traders compete with these Algobots? You can buy various (lesser) systems for short-term trading from your office or home – but, you will be heavily outclassed by the heavy-duty, secretively-informed “long” before you, exchange-floor located Algobots! My plan, instead, is to not do short-term trading! That game is heavily rigged and not really available to me – and I abhor it! Though it takes a heavy commitment to **deep** “digging” and analysis, I am pinning my investment hopes strictly on long-term-focused, actual analysis of companies, their technology/products, and the markets for the products. On that basis, I believe BSD Medical offers a stellar outlook!
>Fact is this stock is down 50% from 9/26/2012 (the date this board was created), while broad market up something like 15% in that time, and their profit and loss statements look sad.<
See the link below to understand why I see no genuine meaning, for actual investing, to short-term stock price gyrations (and BSDM’s history shows huge rises, as well as falls – short term). None of these gyrations reflect the actualities of the company, its products, and their markets – which portend a stellar future for BSDM, IMO.
>It seems to have good technology, but that alone does not make for a good investment. If my holding was a taxable account I would already have sold to recognize the loss. Since that is not an issue, I will hold on for now looking for a better price to exit.<
I suggest waiting until, at least, a) their next product is revealed and b) another large marketing partner is arranged (they have several in progress and claimed to be imminent – listen to their last CC, still available at their website). And, while you wait, contemplate that BSD Medical is developing (is the clear world leader for!) a whole new cancer treatment regime – not just yet another pill, for example. Does that not justify a deep look and a steadfast posture?
Regarding short-term trading, below is some very important reading/viewing (message from the IV MB). (Hunsader is the leading guru re the mind-boggling HFT scandal – a Wall Street scandal to beat all others):
>>Stock Market Corruption Reigns
Before visiting the link below, remember that HFT (High Frequency Trading), which also (by inescapable inference) means HFQ (High Frequency Quoting) involves high **volume** quoting and trading – and high volume order **cancelling**. All of these things – the entire stock trading process – are now so fast as to allow massive manipulation and thievery (by exploiting the fundamental latencies from light-speed limitations). This activity has rapidly grown over the last ten years and recent estimates are that about 90% of ALL trading is being done on an HFT basis! This surely suggests even small-company stocks are being manipulated – or at the very least heavily effected due to investment money being diverted into hyper-short-term, manipulative trading. ***Why bother to invest when sanctioned stealing is so easy and lucrative!!***
The detailed mechanics of how speed-of-light limited manipulations work have been exposed for years now – very notably by “Nanex” (Eric Hunsader’s company). Here is a recent publication. It is complicated, and needs more study than I have yet put forth. But, I believe the conclusions are inescapable – and they mean the stock market is thoroughly broken. This should be “topic No. 1” for people pursuing INVESTMENT opportunities – or just abhor rampant corruption. <<
nanex.net
<<“Nanex ~ 15-Jul-2014 ~ Perfect Pilfering”
“A detailed data-centric exposé on how the market is rigged”
Only the text of the Conclusions section is copied below --- not the charts – and note the “jab” at Mary Jo White (SEC Head) and other inept officials. There are ways to stop this outrageous, entrenched criminality, but those ways will need a strong public hue and cry to be achieved. Contact your congressmen and do some table pounding! Write to the editors of publications and suggest they publish articles. Those editors want to know about what concerns the public, and the incredibly corrupt stock market is an important, disgusting “villain” to expose.
<<Conclusion
All this evidence points to one inescapable conclusion: the order cancellations and trade executions just before, and during the trader's order were not a coincidence.
This is premeditated, programmed theft, plain and simple.
Michael Lewis probably said it best when he told 60 minutes that the stock market is rigged.
To the High Frequency Traders (HFT) that make fantastic claims about providing liquidity, perhaps one should ask: "what kind of liquidity"? To the now obvious, ludicrous claim that "everyone's order uses the same tools that HFT uses", we'll just say, the data shows otherwise. To Mary Jo White and other officials who claim the market isn't rigged and that regulators need to look at the data before making any decisions: well, you were able to read this far - if things aren't clear, re-read this expose (or the nearly 3000 other pages we've published), or simply call us and we'll explain it to you. Or dust off Midas and let us show you how to work with market data.
One more note to the SEC in particular - if you believe that the industry can fix these problems on their own, then we believe you are no longer fit to regulate, because that is not, and never was, how Wall Street works. Honestly, a free for all, no–holds–barred environment would be better than the current system of complicated rules which are partially enforced, but only against some participants. And make no mistake, what is shown above is as close to automatic pilfering as one can get. It probably results in a few firms showing spectacular, perfect trading records; it definitely results in people believing the market is unfair and corrupt.
And to CNBC and other financial media companies who say these problems have all been fixed - you may have been lied to. Probably by the ones doing the market rigging. A certain HFT lobbyist group immediately comes to mind - the one that presents the same tired "liquidity, spreads, costs" argument, without data to back it up. This paper shows that the liquidity claim is clearly a lie.
Academics interested in continuing the study shown on this page - we believe we know how you can find and quantify these events. Serious inquiries only please.
Note that none of this would be possible if the direct feeds weren't illegally supplying HFT with faster information than the SIP. The SIP was created to tie the liquidity together from multiple exchanges - not to split up liquidity and allow HFT to get in the middle of market orders!
Follow up
The next day, the trader who sent us trade data used in our analysis, switched over to using IEX's router, and on July 17, 2014 made 33 trades with an average size of 20,000 shares each in the same stock (Ford). The results were nothing short of spectacular. We present the results of one of these trades from the IEX router (far right) compared to the ideal (left) and the example discussed above (middle). Note that most of the executions took place on lit exchanges.>> |
