Here is a relevant question regarding Merlin and othersMy answer is Immediately below..
FROM A PM( questioner's name Ommitted to protect the innocent)
Anthony,
Hey, great thread. I've been reading it for about a week now and I really like it. Like they say on the tour: "you da man"
I've got a question for you.
Does the law read that as long as you post your trade before you actually do it, everthings hunky dory???
I was reading the Merlin thing and it sounds like he has quite a following. Kinda like yourself.... So as long as he posts his trades before he actually does them, and he puts out the "I'm not a broker disclaimer", He's good to go??
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ANSWER
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Actually there are many self proclaimed gurus and they have many different trading techniques, I will try to outline the most basic forms:
1.) The picker who loads up on a thinly traded issue for days or weeks and builds a good sized position in a very tight little deal, and then waits for the right moment and announces it as his next pick and allows his followers to fight over each other as they buy it..meanwhile he is merrily selling into the frenzy a and offers an occasional word of encouragement to his sheep as they see the price climb, peak and then fall..Then he will call critics dogs for doubting his prowess..These types have bben known to use their position to solicit and accept specila deals from comapanies that they would never otherwise touch..sacrificing a whole herd of sheep knowing it will easily be replaced ..BTW most sheep wont abandon such a guy until they run out of money or are personally offended..peer pressure is very strong in such a group..Nobody wants to be the party pooper..hoping that by publicly showing loyalty they will get maybe a special tip.
2.) The picker who is working with the copmany and has undisclosed incentives and stock or options and actively works only a few deals regardless of price to keep bringing in buyers ,,and always promising great news is on the horizon..all the while the company obliges them by inventing press release after release that when dissected are actually meaningless ..These guys are only ineterested in getting insider stock bought by the public over a long time..The paid tout..
3.) The picker who is apart of a scummy group of brokers that have an established position in a stock and they actively devise a campaign tht fits into the hottest news of the times..These are the ones who seem to be answering the next AMZN..quest of investors..These are known as the MO-MO plays..usually very carefully orchestrated taking up alot of time and money and can add significant value to a stock but they also die very quickly..when the next best thing comes along and their position has been flushed out at much higher levels..
4.) The pickers that actually do no trading whatsoever but recruit Internet lurkers who have lost money and are complaining and who may appear to be vulnerable..They will approach these people asking them to tout a stock or two and may even help them with what to say..and they promise some form of compensation depending on how successful they are at convincing others that a given stock is a great buy..These individuals are easily dissuaded and stopped by simple confrontations and some direct questions. They will never disclose who turned them into touts because they know to do so would be admitting they participated in a scheme..
5.) licensed guys acting as regular investors in the hopes that by sounding intelligent they can overwhelm the average investor intio thinking that a certain stock is actually a good buy..This category has the known criminals who hide behind an innocent facade,,trying to lure buyers..These guys are sporadic and dissapear quickly and usually only post after market hours ..since they hav e to be at work..
6.) The multiple gang -bang reco's..when one guy will act as many using many names and various accounts to promote the same issue..usaully appears to have very fluid dialougue that goes into great deatil by a few people that are actually the same guy or gal..having a conversation with themselves ..they usually have some connection with the company..
7.) The paid broker..one who is getting a undisclosed bribe to sell the stock..these guys will usually recommend firms.,., market makers and or Investor relations firms or contact that will do the directing for the broker...They also seem to have a very intimate knowledge of the company and the insiders...
8.) The honest joe, who takes a position and then says he did and gives some insight as to why..but if presented with new info ,,he or she is able to make a new decision and even reverse their opinion..Not paid and not trying to front run..( VERY RARE ..ONly a few I know of On SI and none on Yahoo )
9.) The rarest of all..Ex-NASDAQ market maker, who was chief analyst, and who has the insane philosophy that by posting what he intends on doing in the next few seconds and at what price will be seen as an honesty that hasnt ever been seen on Wall Street..he then discloses when he is closing each position BEFORE he does and gives reasons as to why he initiated the position in the first place ..His decisions are usually followed by extensive research and expense and at no time will he shy away from admitting he made a mistake..regardless of how his ego might take it..His trading is an open book and anyone can easily follow along and know almost exactly what he has at any given moment...His posts are usually consistent and never contradictary...He doesnt accept payment from any source to buy or sell anything and his services are not for sale....He just simply shares his trading with the public..
Obviously there are many other types and I havent gone into some of the others but that is a good start..you may recognize some of these types in yourtravels on SI...or elsewhere on the NET..so be carefull and if it sounds like its a big secret..Its not... |
