* * * * *
On the Internet, no one knows you aren't a Wall Street analyst
> “People who trade stocks, trade based on what they feel will move and they
> can trade for profit. Nobody makes investment decisions based on reading
> financial filings. Whether a company is making millions or losing millions,
> it has no impact on the price of the stock. Whether it is analysts,
> brokers, advisors, Internet traders, or the companies, everybody is
> manipulating the market. If it wasn't for everybody manipulating the
> market, there wouldn't be a stock market at all.…”
>
Via TechDirt [1], “Jonathan Lebed: Stock Manipulator, S.E.C. (Securities
Exchange Commission) Nemesis—and 15 [2]”
If you read the article, it's not exactly clear what Jonathan Lebed did that
wasn't any different than anyone on Wall Street would do, other than not
being a part of Wall Street (and maybe being a 15 year old kid—that's kind of
hard on the ego to be sure). Jonathan also states that the stock market isn't
really based on anything rational (like that's anything new—my Dad considers
the stock market a form of legalized gambling for instance) and he was able
to buy quite low, hype then sell high and make nearly $800,000 in about six
months or so (during the Internet Bubble).
I occasionally get spam hyping some penny stock, something like:
> **From:** Tom Schser <
[email protected]>
> **To:** (bogus addresses)
> **Subject:** OTC (Over The Counter) Stock Play
> **Date:** Fri, 20 Jun 2003 12:40:45 -0700
>
>
> OTC Stock Alert's Last Two Picks:
> CPLY from $.08 to $.53 in 12 days fro a GAIN OF OVER 500%!!!
> YPNT from $.22 to $1.25 in 18 days for a GAIN OF OVER 400%!!!
>
> HERE IS OUR NEXT EXPLOSIVE STOCK PICK:
> C.E.C. Industries Corp. (OTC: CECC)
> BUY AT $.19
> SELL TARGET $.85 = DIAMOND PLAY!
>
> URGENT HOT NEWS: CECC Secures $20,000,000 Equity Financing for the
> Completion of Revenue Producing and Profitable Acquisition Targets.
>
And so on. And if you check the history of CECC [3] you'll definitely see the
spike around June/July 2003, although it never did get anywhere close to 85¢
a share; it looks like it peaked around 45¢ a share. But Tom there probably
never expected it to reach 85¢ a share—he probably dumped it once he doubled
his money.
Even funnier, one money later, I got the exact same spam (only this time,
from a Dave Schasrger—
[email protected]), only this time, the buy
price was 25¢ and if you check the history, it went up, but not like the
first time. Possibly someone saw the past history, bought into it, and dumped
it before Dave could.
Pure speculation on my part.
Now, it might be interesting to see how the next one of these plays out.
[1]
http://www.techdirt.com/articles/20031001/1652203_F.shtml
[2]
http://www.cs.brown.edu/people/rbb/risd/Lebed.html
[3]
http://finance.yahoo.com/q/bc?s=CECC.PK&t=1y&l=on&z=m&q=l&c=
Email author at
[email protected]
