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In the UK, GSK also falls prey to shorters without reference to actual financial performance and though not so dramatic in effect galling nevertheless. The emphasis on Innovation is a thing both companies hold in common and I wonder whether punishing the costs of bringing truly innovative product to market is one of the things that attracts the ***** whose only expertise is working the rise and fall of lines on a graph!
It is possible they are driving the price down before earnings for the next move up.
Armen
Your article is welcome, as it serves to educate other investors about this practice, and ergo, help make them more immune from losses they might have incurred had they not been aware of these manipulations.
Well done.
david forjan
GS, among the best of the financials, is down 27.5% from 52 week high, Wachovia is down 85% from 52 week high, Lehman down 80%. Apple's competitor's by divisions...RIMM is down 25%, Dell is down 40%, MSFT is down 35%, Even the Googlesaurus is down a whopping 40%.
My gut level is that a lot of stocks are undervalued by a lot more than 4%, and they were run down the same way but fell a lot further because of fundamentals. Our favorite Apple has kept us from real pain by consistently delivering results.
Speculation swings to the downside as well as the upside. And when Joe Six Pack buys and sells he is also involved in setting the price point. If Joe Six pack hadn't helped overvalue it by 10%, it would have been less likely that the bigs could run it down 5%. I bought some of those puts and calls that helped set that max pain level too.
The bigs are not trying to trick us, they are trying to maximize returns out of the bucket of crap that happens when energy doubles YoY and the manufacturing base is emigrating to escape union labor and environmental regulation.
If Max Pain is where they make money, shame on us for not being prepared for that. Anyone that bought the bumps and sold the dips yesterday got what happens when you're on the wrong side of the trade. I hate it when it happens to me and I understand the pain, but my Number 1 rule is, stocks don't move in a straight line, and if you are correct on the trend, you'll eventually be OK. Secondary to that is: Any trend can end at any time. And like golf, the only shot that counts is your next shot. No fortune made or lost is permanent.
You either have the brains and guts to play here or you don't. You are playing against the best and the brightest. (I just have moderate brains, good instinct and guts) If you aren't up to it, there are safer ways to build wealth. But if the big kid keeps taking your lunch money, you can either learn to fight better or you can leave your money at home.
My bet is they looked at the price, they looked at Max Pain, they sensed all the fear after Google and RIMM and they decided that 165 could be done. On 13 Jul, I posted in this forum that I was looking to pick up the stock at 165. I did, and I hope it wasn't a mistake but it is what it is. We'll see whether I'm a hero or goat next week.
Happy Hunting
BTW I'm sure you've already seen this but here is a link to a blog that describes Market manipulation by Jim Cramer.
http://www.midasoracle.org/2007/03/27/jim-crame...
http://seekingalpha.com/article/85882-mother-of....