Well, I will say you are really a fool !!!
Stock is controlled by supply and demand. More shares on the buying side than selling
side, then it goes up, otherwise going down. There are many many factors which will
influence the buying vs selling equilibrium . It can be the fundamentals of the company
, it can be the monopoly of the big money, it can be the fund managers do not have
good personal friendship with the managers ...etc, but , all in all , it is the money game.
If you are fund manager with billions of dollars on hand , theoritically and in reality you
can buy and sell to push the stock down gradually, or push up gradually, no matter how great
or how bad the fundamentals is. It can be your brokers who sell short your stocks into the market right after your buy order went through. However, in some countries which have
better financial market systems, the brokers are not allowed to sell short your stock without
your approval, for example, in Taiwan, the stocks are keep in a central area by the government, the brokers, the sellers, the buyers never even see the stocks when transition
takes place. In Hong Kong, selling short is not even allowed.
As you said CPQ is where it is not because the short.To me, this comment only means you
are still in the kindergarten level in investment. Based on your statement, I think what you are
trying to say is that CPQ had fundamental problems which cause the stock price to drop to this level. If your theory hold, then how can you justify the stock price of AAPL? thinking about its market shares, its earnings, and revenues ...etc, do you think AAPL's current price can be justified ? Then what about AOL ? Yahoo ? ....etc , So, all in all, it is money talk,
big money can always influence the buying and selling, it all depends on the chemistry of the
big money managers. So, if you are big fund managers with billions of dollars to control, you can always win , whether in shorting or long. But if you are smaller investors, if you sell and
buy, your chance to win is 50%. However , in longer term, stock with sound fundamentals always appreciate , just a matter of time . So, to win the market as a small investor, your chance is to hold the stocks with sound fundamentals for long term, your loss is time, but
you win the profit.
Yes, the money managers can control the stock price , but they can control only when the
sentiment of the general investors about a stock is neutral. For example, between $35 to $35,
the general sentiment about CPQ is neutral, 50% people think it will go up when the price is
between $30 to $35 range, and 50% think it will go down, it is this kind of sentiment which give those fund managers big opportunity to monopoly the stock price with their money,
because the resistance for the stock going up or down is small. However, as the stock droped to a certain level, when the general sentiment of the investment community to a certain stock
changed, that is change from neutral to positive, when every body thinks the stock is a good
buy at this level, the money managers lost its control, and that is the time the stock starts
to bounce back. In the past one month, we see CPQ droped quickly from $37 to $27, and
continued to pull back slowly from $27 to $23. If you are the short sellers, you would like
to push the price all the way down from $25 to $15, however, the bigger buying power, the
general investors think at $23 to $25 level, the stock is really a good buy and all jump in.So,
the stock price floated and drop very slow or even did not drop, then that is the bottom. The
power of short and long balance right over at this price level. The money managers can not
control the stock price when it reachs the max or min level, because at that level, the general
public, with much more money, will either jump in or out of a stock. We, see strong support
for CPQ at the low $20s level, those are the new money comming from the general public who think the price at this level is a good buy, and the short probably will lose control pretty
soon. As to the price drop to $15, the chance is very remote. Fundamentally, if CPQ drops to
$15, with its market shares in the PC industry, its revenue, its earning, it is very hard to justify , with annual revenue of $37 B (including DEC), especially the futuref prospect
in the enterprise computing arena after mergering with DEC. If CPQ drop to $15, then How can people justify the bottom price of AAPL of $13 with millions of loss every quarter, and shrinking market share and revenues ? Technically, if the shorters short the stock with millions of shares everyday at this price level, you will see infinite of new money comming to the market to pick up the shares, and those investors will probably not sell their shares till
the stock price is double. The question is , where are those shortters going to buy back the shares
to cove the short positions ? Those new investors will not sell at those level !!!!!And that
is the time the shorters get squeezed, and trapped !!!
|
