I’m seeing a lot of comments/emails from people re-shorting these pump and dumps waaaay late in the game, just because they missed profiting from the initial dump. Here’s a tip—STOP!
Yes, these companies are all crap (okay, okay 99.9%, but this is the last time I’ll ever qualify that), but you gotta understand crap companies can and do rise faster than quality companies for several reasons:
a.) there’s no pesky actual businesses to get in the way of hyping / putting out fraudulent / exaggerated press releases so investors must only be convinced of the dream, not the execution of the dream, which is helpful considering the harsh reality / inevitable failure of these companies
b.) no pesky morals or ethics instilled in those who manage such companies / promote such stocks
c.) the ever-replenishing supply of suckers willing to put their money into far-fetched dreams and their unwillingness to be skeptical or cynical until they lose their $ and vow never to repeat the same mistakes…not that it matters cuz there’s always new suckers who don’t know any better!
d.) most importantly, you, the naïve short sellers—who mistakenly believe that just because a company is crap / fraudulent, it’s gonna go to 0—because you guys are the ones who take longer-term short positions and get squeezed when the scumbag company/promoters pump these suckas up!
My blog is not some BS entertainment outlet like CNBC (remember the GTE pump, yeah, it still hasn’t broken out and actually coulda woulda shoulda been a good short for 15%!)—here I profit based on probability so I don’t make impossible-to-have-any-edge-whatsoever predictions. I take it one high percentage play at a time, trades that have excellent risk-reward ratios and when I’m wrong, I focus on cutting my losses quickly.
When you randomly short dogsh#@ stocks like (KOG), (EDEN), (PSTI), (ORGN), (CNOA), (PWSV), (OCTL), (TIGR) you risk getting caught in/causing big short squeezes—sure, there’s still some downside on these stocks—and if you have excess capital to spare for a few months, they might be worth it—but for you guys out there with TIM-sized accounts and under, the risk-reward ain’t pretty! For us, the only time to short is into that initial dump because as I’ve posted again and again, the variables are perfectly aligned, the odds are in our favor…trust me, I’ve been profiting handsomely and refining PennyStocking for nearly a decade now, I’ve considered all the angles. Don’t believe me—good!
Trust charts over humans, former pump and dump IDMI:
Posted in 101bad, Bad Trades, CNBC, DVD, Manipulation, Patterns To Avoid