The Libertarian party...

[Fairweather]

Some modern economists now believe that FDR's policies may have prolonged The Great Depression.

[Off_White]

Everybody has to believe in something.

 

 

I believe I'll have another beer.

[jjd]

But how do you know (in real time) that a CEO or other insider is selling at the time a stock is going down? How do you know it is not just external market forces?

 

I would say that it doesn't really matter. If you see the stock going down and insiders selling (they disclose planned sales), that should give you an indication that something is wrong. Don't get me wrong, I think insiders should have to disclose their sales so that the rest of us know what they're doing. I just don't believe we should limit the reasons why they sell.

 

If the privileged few have secret data, act on it in real time (sell before an impending loss that occurs in real time), then this ought to be illegal.

 

It is pretty unlikely to only be a priveleged few that know. Stock prices tend to reflect possible problems. A perfect example of this is the prices of Enron, Dynegy, and Tyco leading up to their accounting fraud blow-ups. The prices of all (as I recall) fell significantly leading up to the news. I don't see how insiders trading on this information harms other investors.

 

"This is not only unfair but disruptive to a properly-functioning market: if insider trading were allowed, investors would lose confidence in their disadvantaged position (in comparison to insiders) and would no longer invest."

 

The above quote is clearly a point of disagreement between us. I believe with adequate disclosure of insider trading, investors will have confidence in markets. I don't believe it is a disadvantaged position if you know what they're doing.

[jjd]

I still believe that requiring the actual company insiders to disclose their trading is a positive thing.

 

I agree with that 100%.

 

How did the implied volatility during that period compare to historical averages for the stock? Keep in mind too that someone had to write those put options and they probably lost their asses. However, average investors don't write options, considering the margin requirements for uncovered positions. It sounds like the stock attracted quite a few speculators, which isn't surprising.

 

People should realize they are undertaking significant risk when they invest in stocks like that, especially when there is major news coming out. I don't think preventing insider trading affects that situation at all, provided that it is disclosed.

[Skeezix]

Libertarians ...they're the guys that walk on the Don't Walk signal.

[jjd]

Libertarians ...they're the guys that walk on the Don't Walk signal.

 

[scott_harpell]

Gimme a break. Full-timers got hammered because they were, as one person eloquently stated, "irrationally exuberant". They weren't duped, they were greedy...and the greedy pigs get slaughtered.

 

So with these greedy investors, is it possible for a small time investor to have a chance with out a regulatory system in place? Obviously the average Joe doens't have the time to research their investments to the extent that would assure the retention of his wealth. The only other solution is for small-timers not to invest and I think that would be a bad idea.

[jjd]

The only other solution is for small-timers not to invest and I think that would be a bad idea.

 

Their other solution is to purchase mutual funds, index funds, and exchange traded funds. Smaller investors probably shouldn't be investing in individual stocks unless they are prepared to for the time required, as well as the higher risk involved.

[JoshK]

What don't you get? insider trading is illegal for a reason. give it up.

 

Opinions are like assholes, everybody has one. Both presidents with the last name "roosevelet" were great presidents.

[cracked]

All this bad weather is grating peoples' nerves.

[willstrickland]

So with these greedy investors, is it possible for a small time investor to have a chance with out a regulatory system in place? Obviously the average Joe doens't have the time to research their investments to the extent that would assure the retention of his wealth. The only other solution is for small-timers not to invest and I think that would be a bad idea.

 

I don't advocate removing the regulations. In fact, I think they are insufficient particulaly with respect to accounting requirements. The GAAP doesn't require expensing of options, (which some companies do report as expense), and that is b.s. in my book. It inflates earnings, and in the end it's all about earnings.

 

It is more than possible for the little guy to research and do their own decision making. I do very well for myself. I would never pay a professional because I know from first hand accounts (i.e. brokers) what goes on in the brokerage houses. They are all fucking crooks.

Keep in mind that Wall Street draws the best of the best minds. You are competing with extremely savvy people. Program trading (automated computer generated trading running off complex algorithms) is growing to be something like 60+% of all transactions. It throws an incredible amount of noise into the markets.

 

You can take a small cap biotech like Genta that has a big beta..like 2.7 or something and the price fluctuations don't represent as strong of a quality signal. The thing could easily take a 25% haircut without anyone batting an eye because it happens so often, only to rebound. By the time the signal is clear, the slaughter is in full swing.

 

I know a guy in PDX (the 'couv actually) who had a good stake in AVII (a local biotech). He liquidated all of it at a loss (took a 1/3 drop from March to late April) and got into Genta after the big sell off. He figured the market overreacted (as it often does, I've been cleaning up on overselling and the resulting rebound of MO on bad news in tobacco lawsuits). He got into Genta fully, it continued down and he lost half his money in about a week, erasing 2 years of sucessful trading. All because he went on non-fundamentals. Greed kills.

[JoshK]

 

You are next in line to lose your money if you actually think common sense or some sort of algorithm can win you money in the market. Estimating human stupidity isn't much of an exact science. OK, I'm real drunk...going to bed now...

[klenke]

Semantics. Who cares. Insider trading of the illegal sort is illegal. Insider trading of the legal sort is legal. Nuff said.

 

One bush, beaten, all sides.

[willstrickland]

 

You are next in line to lose your money if you actually think common sense or some sort of algorithm can win you money in the market. Estimating human stupidity isn't much of an exact science. OK, I'm real drunk...going to bed now...

 

You are obviously drunk since you didn't comprehend any of what I said. Do you even participate in the markets?

 

The big brokerages are using "program trading" which is essentially automated trading based on algortihms and the extent of this program trading represents a very large and growing percent of the transactions everyday (estimates put it in the 60% range). I don't trade with algortihms, tech analysis/charting voodoo, or anything else aside from fundamentals...cash flow, debt, earnings, dividend history, short interest, etc. I read the 10Qs, I read the balance sheets and income statements, I research the industries. Granted, when a company like World Com or Enron is cooking the books, even the most diligent research falls short, but with proper diversification even a total collapse of a company like that would not hurt you too bad.

 

Common sense is the basis of any good investment strategy. Short term trading is much more about psychology and luck. I make short term trades, but as a very small percent of my holdings and in companies that are solid, large cap, dividend paying equities - MO, PG, GE, ABT, MRK, etc.

 

All these "wall st darling" growth stocks are like playing with fire. Krispy Kreme, Starbucks, Taser....all waiting for a smackdown. And Taser got theirs, I shorted that shit with no reservations, it went up for another week and a half and then took a huge nose dive giving me a nice 23% return for nothing more than saying "this thing is WAY overpriced for it's growth potential" and acting on it. What do you really think the growth potential for Tasers is? People had the thing priced like they were going to have one in every home in the country.

 

I'd wager that the "average joe" who is using mutual funds doesn't even understand the fee structure they are paying, nor do they know the true returns of those funds. The numbers the fund companies feed them don't take into account tax issues or fees. 80% of mutual funds don't even beat the S&P500 on an annual basis and less than 5% do it on a recurring basis. Joe Average could do better by simply buying SPDs or DIAs.

 

Mutual funds are another scam for people unwilling or unable to learn about the markets.

[JoshK]

 

You are next in line to lose your money if you actually think common sense or some sort of algorithm can win you money in the market. Estimating human stupidity isn't much of an exact science. OK, I'm real drunk...going to bed now...

 

You are obviously drunk since you didn't comprehend any of what I said. Do you even participate in the markets?

 

The big brokerages are using "program trading" which is essentially automated trading based on algortihms and the extent of this program trading represents a very large and growing percent of the transactions everyday (estimates put it in the 60% range). I don't trade with algortihms, tech analysis/charting voodoo, or anything else aside from fundamentals...cash flow, debt, earnings, dividend history, short interest, etc. I read the 10Qs, I read the balance sheets and income statements, I research the industries. Granted, when a company like World Com or Enron is cooking the books, even the most diligent research falls short, but with proper diversification even a total collapse of a company like that would not hurt you too bad.

 

Common sense is the basis of any good investment strategy. Short term trading is much more about psychology and luck. I make short term trades, but as a very small percent of my holdings and in companies that are solid, large cap, dividend paying equities - MO, PG, GE, ABT, MRK, etc.

 

All these "wall st darling" growth stocks are like playing with fire. Krispy Kreme, Starbucks, Taser....all waiting for a smackdown. And Taser got theirs, I shorted that shit with no reservations, it went up for another week and a half and then took a huge nose dive giving me a nice 23% return for nothing more than saying "this thing is WAY overpriced for it's growth potential" and acting on it. What do you really think the growth potential for Tasers is? People had the thing priced like they were going to have one in every home in the country.

 

I'd wager that the "average joe" who is using mutual funds doesn't even understand the fee structure they are paying, nor do they know the true returns of those funds. The numbers the fund companies feed them don't take into account tax issues or fees. 80% of mutual funds don't even beat the S&P500 on an annual basis and less than 5% do it on a recurring basis. Joe Average could do better by simply buying SPDs or DIAs.

 

Mutual funds are another scam for people unwilling or unable to learn about the markets.

 

Yes, I was drunk.

 

I have some money in the market, and it's managed by a professional.

 

For knowing how to make so much money in the market, it seems like you should be wealthy and retired by now...

[Skeezix]

What are SPDs and DIAs?

[JoshK]

Post deleted by Off_White

[willstrickland]

They are ETFs...exchange traded funds. SPD=Standard & Poors Depository receipts and DIA=Dow Jones Industials depository receipts. They are essentially like owning shares of a stock in that they trade on the AMEX, but they are made up of the components of their reference index. For example, one share of DIA is composed of some fraction of all 30 DJIA stocks. It's like getting the instant diversification of mutual funds with a very low cost basis (i.e. no load fees, very low tax hits because they aren't trading unless the components of that index change). Furthermore, you can trade them at any time, unlike many mutual funds which specify when you can withdraw, etc.

 

There are alot of ETFs, and one of the most traded issues on any exchange is QQQ (nickname cubes), which is the ETF for the Nasdaq 100.

 

The road to wealth isn't a racetrack Josh. It takes capital to make capital, and for the first time in my life I'm making enough at my job to allow a sizeable portion of my salary to go into my investments. I'm not into high risk ventures, and I don't make gambles. I'm doing ok, and I forsee retirement at a young (40-45) age. That's good enough for me. Wall Street is full of crooks, believe that.

[MollyWorld]

What are SPDs and DIAs?

 

Silly Penial Disfunctions and Dildos In Asses?

 

No wonder you don't have a girlfriend.

[JoshK]

The road to wealth isn't a racetrack Josh. It takes capital to make capital, and for the first time in my life I'm making enough at my job to allow a sizeable portion of my salary to go into my investments. I'm not into high risk ventures, and I don't make gambles. I'm doing ok, and I forsee retirement at a young (40-45) age. That's good enough for me. Wall Street is full of crooks, believe that.

 

I know, I'm just spouting shit.. Retiring at 40, even 50, is a pretty good goal. People are just much healthier and stronger into older ages now. I just seems to me that I see so many 50 to 60 years olds now that are running triathalons and shit like that. Back in the day 60 was a lot less active.

[eternalX]

Oh i dig....so the government is suppose to guarantee the investments....i c

 

In the private enterprise, you create companes whose sole job is to report on other companies. They are funded by private investors, sort of like Consumer Reports. If they make mistakes, their business suffers (people don't pay for bad information). I would defintely trust somebody who has a job on the line before some government lackey who gets paid no matter what happens.

 

[Billygoat]

What are SPDs and DIAs?

 

Silly Penial Disfunctions and Dildos In Asses?

 

No wonder you don't have a girlfriend.

 

Really now. How important is that

[icegirl]

???

[willstrickland]

In the private enterprise, you create companes whose sole job is to report on other companies. They are funded by private investors, sort of like Consumer Reports. If they make mistakes, their business suffers (people don't pay for bad information). I would defintely trust somebody who has a job on the line before some government lackey who gets paid no matter what happens.

 

This already exists in several forms...Standard and Poors, Value Line, and the brokerage houses and banks have analysts assigned to cover specific companies or sectors. I like S&P's research and they have no inherent conflict of interest. It is a starting point for me, but certainly not a be-all end-all. Value Line is in almost every public library system in the country.

 

The brokerage and bank analysts are crooks though. Go look at the upgrade/downgrades and what price levels they occured from say the Bank of America analyst covering AMAT. If you had listened to these jokers you would have bought at 25, sold at 20, bought at 23, sold at 19....etc. You'd be poor. Crooks!