SEC Says Nasdaq Venture Market May Attract Stock Manipulators
To contact the reporter on this story: Nina Mehta in New York at nmehta24@bloomberg.net.
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.
TMSH this is one of those life changing reverse merger stocks. Today it
recovered from two straight days of losses to close up 129%. Are we looking at a
resumption of the breakout? If so just how much higher can this stock go? $.40,
$.50, $1.00? This is why we love this market. We won't know until after the
fact, but it will be fun to watch.
A Personal Note from Tim: It is Sunday afternoon, and on this quiet, rainy day I decided to check and see if there were any new posts drafted for the blog. There was one - by Market Sniper - shown below.
There are a number of people on Slope that make it what it is. I am in awe on a daily basis how much time, energy, and thought goes into this community. I am truly delighted to be about the 20th most important person on Slope now.
Market Sniper - affectionately also known as Dutch - has been a bedrock of the site for a long time. There's no one that has published more comments (I won't reveal the number, but let's just say it's very deep into five-digit territory) and no one more passionate about trading the right way.
He shares with us here a personal story which is troubling, tragic, and important. I know of others who have gone through this kind of thing themselves, and the whole topic of depression, gambling addiction, and suicide in the world of trading is the 800 pound elephant no one talks about since the gloss of flashy ads and suspicious success stories are more alluring.
I thank Dutch for his continued work here on Slope, but most particularly for this article. Read on:
Yesterday, December 18, 2010, I received news that was both personally devastating to me and filled me with rage at the same time. A friend of mine, a trader, took his own life. Rather than let this experience go to waste, I thought I would share it with the Slope community as it is also a cautionary tale.
I have known my friend for a number of years. He comes from a semi-wealthy background and is Canadian of Lebanese extraction living in the United States. A good man. A kind and caring man but a very proud and head strong man now aged 50.
He came to trading actively in 2007. He was a normal newbie trader, greed driven with some success at first. He chose to predominately trade gold ETFs and the SPY. Predominately options in both. He would often take $25,000 single directional positions be instantly rewarded with up to $250,000 and then with increased size, feed it all back plus more. His account equity swings were, at times, horrendous. When he traded gold, he ONLY traded in one direction which was long. He was constantly looking for input as to the next directional move in SPY. Constantly seeking to detect bottoms and tops.
My friend and I had constant discussions about the need to use methodology, risk control, trade management and discipline. I begged and urged him to back off, get his head and game plan together before proceeding further. It always fell on deaf ears. A year or so ago, I thought I detected some progress. I stayed in touch on a regular basis. Around a month ago something changed. I knew that because he was evasive as to how his trading was going. I did not press him to what is now my regret.
He had traded away $900,000 in cash. Account down to almost the cost to wire out what was left. His mansion was in foreclosure and he was reduced to selling anything of value to put food on the table daily. He had lost his wife's money as well as his wife's daughter's money in addition to the $900,000. Driven past the edge of despair, this proud but kind, gentle and open hearted man, woke up early Thursday morning, pistol in hand while the household was still asleep, walked up to the top of the hill overlooking his mansion, put pistol to head and pulled the trigger. In the suicide letter he stated that he was "just too old and too tired to start over again."
My friend was not really a trader. He was a gambler with no edge whatsoever. Therein lies the cautionary tale. IF you can see yourself in ANY of this, do yourself, your family and friends a favor. Stop clicking the mouse. Wire out the money and STOP "trading." "Trading" for you is a poison. Reach out to those around you for help. You will find your not alone.
As to my anger and rage. IF I should ever catch up to my friend, I will plant my 11R boot so far up the backside of his lap that he will be spitting out my boot laces.
In conclusion. NEVER measure your value or self worth by the money you have, the house you have and the other possessions you may also have. We all come into this world with nothing and we shall all leave this world with nothing. We are merely caretakers of any earthly wealth and possessions in between birth and death. Rather, it seems to me, we should measure our TRUE wealth and value by what is in our hearts and minds. Also by family and friends. Life continually throws up obstacles to us. We can choose to be defeated by those or view them as opportunities to rise to even greater heights in self awareness and self fulfillment. Life is short and fleeting. Take every opportunity to increase TRUE wealth. Never put off gaining both the experiences and the knowledge that you desire. Never lose an opportunity to tell those you love that indeed, you do love them.
I wish you all the very best of holidays. Peace. Now go out and DO the right thing.
If Wall Street represents modern capitalism, then the Pink Sheets are representative of the Wild West. To many, the Pink Sheets hardly exist, and the OTC market is just another of the many small and privately owned stock exchanges that have managed to hold on until the twentieth century.
The Pink Sheets is an over the counter (OTC) market designed to allow small companies to trade freely without restriction or hardly any requirements at all. In fact, the Pink Sheets are not at all a stock market, and they are instead made up of many independent NASD brokers who serve as market makers for companies listed on the Pink Sheets.
The Pink Sheets were first founded in 1913, when stocks were traded by a pink paper slip, identifying the ticker symbol and current market price. Unlike the New York Stock Exchange, the Pink Sheets is merely a quotation service, offering only recent price and trade data, but not the ability to actually buy and sell within a sanctioned market.
To list on the Pink Sheets, companies need not fulfill any requirements; instead, they need to only have one approved market maker. Unlike the NYSE or NASDAQ, there are no minimum share sizes, no requirements for financial disclosure, nor is it necessary for companies to actually be in operation.
A number of companies that have fallen on hard times, or have flat out fallen into bankruptcy, eventually slide to the Pink Sheets, where their ticker symbols lay to rest among other once large companies.
The SEC and many other financial reporting agencies consider the Pink Sheets to be the highest risk of any financial product. Since most names are illiquid, bankrupt, or fail to report earnings or other critical data, making money with Pink Sheets is not even an afterthought for many investors, but the opportunities for profit do still exist. Because so many are quick to dismiss the Pink Sheets as stocks that aren't worth owning, there are excellent opportunities in companies that list on the Pink Sheets for convenience or cost, not necessarily because of their own financial difficulty.
In fact, the Pink Sheets houses more American Depositary Receipts of foreign companies than any other stock exchange due to its low requirements and inexpensive listing fees. The New York Stock Exchange, by contrast, requires as much as $125,000 to list a stock on its exchange, an amount that is not easily covered by small companies wishing to trade on US borders, or by banks which seek to earn a profit by bringing foreign stocks to US investors.
At a very minimum, investors should seek to find reporting information for all Pink Sheets in which they want to invest and seek stocks which have volume sufficient enough for easy entry and exit. Since a number of firms are thinly-traded, small orders of stock have tendency to create large waves in share prices, or they may require that investors buy in higher and sell lower than market price.
While the Pink Sheets collectively have one of the worst reputations, not all Pink Sheet listed companies are bad apples. With proper due diligence and minimum reporting, playing Pink Sheets offers opportunities for large profits and risk profiles not much different from other stocks on other stock exchanges. Consider the high growth rates and low price to earnings multiples of the best Pink Sheets stocks to be your reward for the extra time it takes to sort through the losers.
http://www.mysmp.com/stocks/pink-sheets-and-profits.html
The WORST Penny Stocks
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