Market Makers and their "Round Table" commonly known as bashers and pumpers.

[Equity Trader]

Market Makers and their "Round Table" commonly known as bashers and pumpers.

This so called "round table" consists of about 5 paid bashers who respond and post to each other,all with a different agenda...One of the 5 is usually a newbie or an amateur who asks a lot of questions..This one in most cases will tell you he/she does not have much experience investing,but knows much in the way of the negatives points only...There are about 2 in this group that are outright bashers that attack and berate management and the company and will result in undo language.The one in this group is always on the sell position and will say he/she has been a shareholder for sometime..These 3 are your most common types and can be picked out fairly easy...The 4th in this group is your pumper..This type will hype the company to no end with calls like it has a great product and make wild predictions with a time frame...The last of this round table is your leader of this group who probably has a few years in the business in boiler-room atmosphere and is knowledgeable....The last individual is the type who comes with posts like I have no position,but thinking about getting in and believe it will go lower...He/she is always basically posting the same old rhetoric from past SEC filings and in the constant problem of dilution and is hesitant about getting in....This last person will also cast him/her as a friend to the board,but one thing they all have in common is that they respond to each other and their primary objective is to cast doubt and keep the PPS down.....This group comes on board with a vengeance whenever a company is ready to execute more CDs on the market..Sunday's are their target posting times for Monday's opening...This is probably because of control with less honest members posting and they can run the board with their continence bantering...Also many members will just lurk on Sunday's.....


Have a good day...

ET

 

[Captain Crunch]

Equity Trader, you seem to be very knowledgeable in the BB sector. I have read all your posts and have once again started kicking myself in the a$$ after learning a major lesson in the BB arena two years ago. I wish I had been able to read this before I thought all my "penny stocks" were going to do nothing but go up. I was a novice and paid the price. I could have made some good money in some of them, but fell in love with a few of them and watched my profits go bye-bye. You can definetely make money in pennies, you just have to be disciplined and know when to sell. Do you run a subscription service? Keep up the informative posts and thanks again.

 

[Equity Trader]

Captain Crunch

Captain Crunch

You certainly are not alone,many have fallen victim to the pennyarcade with big expectations of a big windfall......

You have hit the keynote and that is discipline and in this very unpredictable arena one must have an exit strategy...Where most fail is when they assume that eventually the company will amount to something only to find that in OTCBB land there are no rules and the market makers control the action,not the shareholders...You can beat them at their game,but one must be able to work in a environment that requires absolute trading without emotions...It is in this area,where the average person will result in most of their losses.

When you trade pennies the amount of shares you buy is very important for you to get the maximum return in a very short period of time....The lower the share price the higher share amount you must acquire..

If a company sells in sub-penny area,it is in most cases garbage and the only players are your very active traders and Mo Mo players...These players acquire a million or so shares and can move out of these share with only a fraction of a rise and still make a nice gain.....1 million shares times .0005 is $5,000.

To give you an example why share count is a relevant factor and determines your profit or loss in a timely fashion,see below..

Example 1:If company x is selling per share at .10 and you buy only 10,000 shares lets say,your turnaround to sell has to be least a minimum of per share .18 to be considered a profitable trade at best...To gain that .08 rise is extremely difficult to obtain in a trading cycle and may never get to that level....See, if company x has 300 million O/S,which is quite common in pennies,the market cap on that .08 will be $24,000,000,very difficult to achieve considering that 98% of the companies never really generate that kind of revenue...

Example 2: Now with the same company if you were to purchase lets say 50,000 shares at .10,then your turnaround only has to be .13,for a gain of 1,500..that is a nice return or ok depending on how you run it...Take out your buy and sell commission and 35% tax,leaves you roughly somewhere around a net of 800 give or take..A rise within this range in pennies can be achieved with fluff PRs that many companies love to send out and then of course the price settles back.....It is at this point where discipline must be adhered to and emotions can not be part of the equation....


So you see that the key is very much in the number of shares you purchase to gain the maximum return in a very short period of time...The higher the share count the less rise in share price needs to be achieved and thus allows you to be able to exit without concern for the need to meet an objective that may never be rational..


Above all you must never buy on a recommendation from a newsletter without a sound implimentation of DD.....These newsletters get shares for touting the stock and when they release the news you will end up chasing the stock,only to have it fall back,after the novelty runs it's course.


I am in the process of building my website and should be up and running before Memorial Weekend.....


Have a good day
ET

 

[Captain Crunch]

ET, thanks for your reply. Everything you stated in your last post rings a lot of bells. I got greedy on alot of issues and started believing to much of what I read on message boards and things of that nature.

I was involved with a penny trader out of California a few years ago and subscribed to his service. He seemed to be on the up and up and always stressed to take profits when possible and he would always let you know when he was promotiing and getting shares as part of his pay. He had his own site (Penny Profiles), but I don't think he is involved in trading pennies anymore, atleast that is what I heard. He had some kind of connection with the "Phemonominal Stock" website, if that rings a bell. I am sure their are plenty of those types of sites out there, but that one seemed to be pretty popular, only giving out about 8 plays/year.

I guess if everyone else is going to play the P&D game, you should to, or you will get left holding the worthless paper.

I would be very interested in taking a look at your website when it is complete. Beings I am new here, I am not sure on the rules for postiing URL's, but I would think there is some way of doing it without offending MadJack.

Good Luck