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RULE NUMBER ONE: ALL SHARP PRICE MOVEMENTS - WHETHER UP OR DOWN - ARE THE
RESULT OF ONE OR MORE (USUALLY A GROUP OF) PROFESSIONALS MANIPULATING THE SHARE
PRICE."
This should explain why a mining company finds something good and "nothing
happens" or the stock goes down.
At the same time, for no apparent reason, a stock suddenly takes off for the
sky! On little volume! Someone is manipulating that stock, often with an
unfounded rumour.
In order to make these market manipulations work, the professionals assume:
(a) The Public is stupid and
(b) The Public will mainly buy at the high and
© The Public will sell at the low.
Therefore, as long as the market manipulator can run crowd control, he can be
successful.
Let's face it: The reason you speculate in such markets is that you are greedy
and optimistic. You believe in a better tomorrow and need to make money
quickly. It is this sentiment which is exploited by the market manipulator. He
controls your greed and fear about a particular stock. If he wants you to buy,
the company's prospects look like the next Paladin. If the manipulator wants
you to desert the sinking ship, he suddenly becomes very guarded in his remarks
about the company, isn't around to glowingly answer questions about the company
and/or gets issued very bad news about the company. Which brings us to the next
important rule.
"RULE NUMBER TWO: IF THE MARKET MANIPULATOR WANTS TO DISTRIBUTE (DUMP) HIS
SHARES, HE WILL START A GOOD NEWS PROMOTIONAL CAMPAIGN."
Ever wonder why a particular company is made to look like the greatest thing
since sliced bread?
That sentiment is manufactured.
Newsletter writers are hired - either secretly or not - to cheerlead a stock.
PR firms are hired and let loose upon an unsuspecting public. Contracts to
appear on radio talk shows are signed and implemented. Stockbrokers get "cheap"
stock to recommend the company to their "book" (that means you, the client in
his book). An advertising campaign is rolled out (television ads, newspaper
ads).
The company signs up to exhibit at "investment conferences" and "gold shows"
(mainly so they can get a little "podium time" to hype you on their stock and
tell you how "their company is really different" and "not a stock promotion.")
Funny little "hype" messages are posted on Internet newsgroups by the same cast
of usual suspects. The more, the merrier. And a little "juice" can go a long
way toward running up the stock price.
The hype is on. The more clever a stock promoter, the better his knowledge of
the advertising business. Little gimmicks like "positioning" are used. Example:
Make a completely unknown company look warm and fuzzy and appealing to you by
comparing it to a recent success story - PDN or AGS.
The only reason you have been invited to this seemingly incredible banquet is
that you are the main course. After the market manipulator has suckered you
into "his investment," exchanging HIS paper for your cash, the walls begin to
close in on you. Why is that?
"RULE NUMBER THREE: AS SOON AS THE MARKET MANIPULATOR HAS COMPLETED HIS
DISTRIBUTION (DUMPING) OF SHARES, HE WILL START A BAD NEWS OR NO NEWS
CAMPAIGN."
Your favorite home-run stock has just stalled or retreated a bit from its high.
Suddenly, there is a news vacuum - either no news or bad rumours.
Many moons ago,I discovered this with quite a few stocks. I would get loads of
information and "hot tips." All of a sudden, my pipeline was shut-off. Some
companies would even issue a news release condemning this group ("We don't need
'that kind of hype' referring to me!). Cute heh? When the company wanted
fantastic hype circulated, there would be someone there to spoon-feed me. The
second the distribution phase was DONE....ooops! Sorry, no more news. Or, "I'm
sorry. He's not in the office." Or, "He won't be back until Monday."
The really slick market manipulators would even seed the Internet news groups
or other journalists to plant negative stories about that company. Or start a
propaganda campaign of negative rumours on all available communication
vehicles. Even hiring a
"contrarian" or "special PR firm" to drive down the price.
You'll also see the stock drifting endlessly. You may even experience a
helpless feeling, as if you were floating in outer space without a lifeline.
That is exactly HOW the market manipulator wants you to feel. See Rule Number
Five below. He may also be doing this to avoid the severe disappointment of a
"dry hole" or a "failed deal." You'll hear that oft-cried refrain, "Oh well,
that's the junior minerals exploration business... very risky!" Or the often
quoted statistic, "Nine out of 10 businesses fail each year."
Don't think it wasn't contrived. If a Geologist at a junior mining company
wasn't optimistic and rosy in his promise of exploration success, he would be
replaced by someone who was! Ditto for the high-tech deal, in a world awash
with PhD's.
So, how do you know when you are being taken? Look again at Rule #1. Inside
that rule, a few other rules unfold which explain how a stock price is
manipulated.
"RULE NUMBER FOUR: ANY STOCK THAT TRADES HUGE VOLUME AT HIGHER PRICES SIGNALS
THE DISTRIBUTION PHASE."
When there was less volume, the price was lower. Professionals were
accumulating. After the price runs, the volume increases. The professionals
bought low and sold high. The amateurs bought high (and will soon enough sell
low). In older books about market manipulation and stock promotion, which I've
recently studied, the markup price referred to THREE times higher than the
floor. The floor is the launchpad for the stock. For example, if one looks at
the stock price and finds a steady flatline on the stock's chart of around 10
cents, then that range is the FLOOR. Basically, the markup phase can go as high
as the market manipulator is capable of taking it. From my observations, a good
markup should be able to run about five to ten times higher than the floor,
with six to seven being common. The market manipulator will do everything in
his power to keep you OUT OF THE STOCK until the share price has been marked up
by at least two-three times, sometimes resorting to "shaking
you out" until after he has accumulated enough shares. Once the markup has
begun, the stock chart will show you one or more spikes in the volume - all at
much higher prices (marked up by the manipulator, of course).
That is DISTRIBUTION and nothing else.
"RULE NUMBER FIVE: THE MARKET MANIPULATOR WILL ALWAYS TRY TO GET YOU TO BUY AT
THE HIGHEST, AND SELL AT THE LOWEST PRICE
POSSIBLE."
Just as the manipulator will use every available means to invite you to "the
party," he will savagely and brutally drive you away from "his stock" when he
has fleeced you. The first falsehood you assume is that the stock promoter
WANTS you to make a bundle by investing in his company. So begins a string of
lies that run for as long as your stomach can take it.
You will get the first clue that "you have been had" when the stock stalls at
the higher level. Somehow, it ran out of steam and you are not sure why. Well,
it ran out of steam because the market manipulator stopped running it up. It's
over inflated and he can't
convince more people to buy. The volume dries up while the share price seems to
stall.
LOOK AT THE TRADING VOLUME, NOT THE SHARE PRICE!
When earlier, there may have been 500,000 shares trading each day for eight out
of 12 trading days, now the volume has slipped to 100,000 shares daily. There
are some buyers there, enough for the manipulator to continue dumping his
paper, but only so long as he can enlist one or more individuals/services to
bang his drum.
He may continue feeding the promo guys a string of "promises" and "good news
down the road." But, when the news finally arrives, the stock price goes THUD!
This is entirely orchestrated by a market manipulator. You'll see it in the
trading volume, most of which is CONTRIVED. A market manipulator will have
various brokers buying and selling the stock to give the APPEARANCE of
increasing volume and price so that YOU do start chasing it higher.
At some point during the stall stage, investors get fed up with the
non-performance of the stock. It drifts for a while, in a steady retreat, with
perhaps a short-lived spike in price and volume (the final signal that the
manipulator has finally offloaded ALL of his
paper). Then, the stock comes tumbling down -- having lost ALL of the earlier
share appreciation.
Sometimes, with the more cruel manipulators, they will throw in a little false
hope... giving you a little more rope so they can better hang you. Just after a
severe drop, there will be a "bottom fishing" announcement which sends the
share price up a bit on high volume, rises a little more after that and then
continues to drift. Meanwhile, you keep getting "shaken out" through a cruel
drip-drip water torture of the share price's slow retreat. Again, virtually
every movement is completely orchestrated.
"RULE NUMBER SIX: IF THIS IS A REAL DEAL, THEN YOU ARE LIKELY TO BE THE LAST
PERSON TO BE NOTIFIED OR WILL BE DRIVEN OUT AT THE LOWER PRICES."
If there's some easy money lying around, no one is going to force it into your
pocket.
The same concept can be more clearly understood by watching the tape. When a
market manipulator wants you into his stock, you will hear LOUD noises of stock
promotion and hype. If you are "in the loop," you will be bombarded from many
directions. Similarly, if he wants you out of the stock, then there will be
orchestrated rumours being circulated, rapid-fired at you again from many
directions. Just as good news may come to you in waves, so will bad news.
You will see evidence of a VERY sharp drop in the share price with HUGE volume.
That is you and your buddies running for the exits. If the deal is really for
real, the market manipulator wants to get ALL OF YOUR SHARES or as many as he
can... and at the lowest price he can. Whereas before, he wanted you IN his
market, so he could dump his shares to you at a higher price, NOW when he sees
that this deal IS for real, he wants to pay as little as possible for those
same shares... YOUR shares which he wants to you part with, as quickly as
possible.
The market manipulator will shake you out by driving the price as low as he
can. Just as in he "accumulation" stage, he wants to keep everything as quiet
as possible so he can snap up as many of the shares for himself, he will now
turn down, or even turn off, the volume so he can repeat the accumulation
phase.
In the mining business, there seems to always be another "area play" around the
corner. Some
even used new corporate entities. Same crooks, different shingles. The
accumulation phase was TOP SECRET. The noise level was deadingly silent. As
soon as the insiders accumulated all their shares, they let YOU in on the
secret.
"RULE NUMBER SEVEN: CONVERSELY, YOU WILL OFTEN BE THE LAST TO KNOW WHEN THIS
DEAL SHOWS SIGNS OF FAILURE."
Twenty-twenty hindsight will often show you that there was a "little stumble"
in the share price, just as the "assays were delayed" or the "deal didn't go
through." Manipulators were peeling off their paper to START the downslide -
and accelerate it. The quick slide down makes it improbable for your getting
out at more than what you originally paid for the stock... and gives you a
better reason for holding onto it "a little longer" in case the price rebounds.
Then, the drifting stage begins and fear takes over. And unless you have serves
of steel and can afford to wait out the manipulator, you will more than likely
end up selling out at a cheap price.
For the insider, marketmaker or underwriter is obliged to buy back all of your
paper in order to keep his company alive and maintain control of it. The less
he has to pay for your paper, the lower his cost will be to commence his stock
promotion again... at some future date. Even if his company has no prospects at
all, his "shell" of a company has some value (only in that others might want to
use that structure so they can run their own stock promotion). So, the
manipulator will buy back his paper. He just wants to make sure that he pays as
little for those shares as possible.
"RULE NUMBER EIGHT: THE MARKET MANIPULATOR WILL COMPEL YOU INTO THE STOCK SO
THAT YOU DRIVE UP ITS PRICE SHARES."
Placing a Market Order or Pre-Market Order is an amateur's mistake, - one who
assumes that thinly
traded issues are the same as blue chip stocks, to which they are accustomed. A
market manipulator (traders included here) can jack up the share price during
your market order and bring you back a confirmation at some preposterous level.
The Market Manipulator will use the "tape" against you. He will keep buying up
his own paper to keep you reaching for a higher price. He will get in line
ahead of you to buy all the shares at the current price and force you to pay
more for those shares. He will tease you and make you reach for the higher
price so you "won't miss out." Miss out on what? Getting your head chopped off,
that's what!
One can avoid market manipulation by not buying during the huge price spikes
and abnormal trading volumes, also known as chasing the stock to a higher
price.
"RULE NUMBER NINE: THE MARKET MANIPULATOR IS WELL AWARE OF THE EMOTIONS YOU ARE
EXPERIENCING DURING A RUN UP AND A COLLAPSE AND WILL PLAY YOUR EMOTIONS LIKE A
PIANO."
During the run up, you will have a rush of greed which compels you to run into
the stock. During the collapse, you will have a fear that you will lose
everything... so you will rush to exit. See how simple it is and how clear a
bell it strikes? Don't think this formula isn't tattooed inside the mind of
every manipulator. The market manipulator will play you on the way up and play
you on the way down. If he does it very well, he will make it look like someone
else's fault that you lost money! Promise to fill up your wallet? You'll rush
into the stock. Scare you into losing every penny you have in that stock?
You'll run away screaming with horror! And vow to NEVER, ever speculate in such
stocks again. But many of you still do.... The manipulator even knows how to
bring you back for yet another play.
"FINAL RULE: A NEW BATCH OF SUCKERS ARE BORN WITH EVERY NEW PLAY."
The Financial Markets are a Cruel, Unkind and Dangerous Playing Field, one
place where the newest amateurs are generally fleeced the most brutally....
usually by those who know the above rules.
The stock markets are a financing tool. The companies BORROW money from you,
when you invest or speculate in their companies. They want their share price
going higher so they can finance their deal with less dilution of their
shares... if they are good guys. But, how would you feel about a friend or
family member who kept borrowing money from you and never repaid it? That would
be theft, plain and simple. So, a market manipulator is STEALING your money.
Don't let him do it anymore. Insist that the company in which you invest be
honest or straight... or find another company in which to speculate. Your money
talks in LOUDER volumes than any stock promotion scheme. ALWAYS refuse any deal
which smells wrong.
Refuse to tolerate the scams prevalent in the financial markets. This can ONLY
be accomplished by KNOWING and USING the above rules. Thoroughly COMPLETE your
due diligence on a company before risking a dime. Dig up the Insider Reports to
find out who is blowing out their paper, how often they are blowing out their
paper and whatever happened to their "last play."
Begin to use this as your rule of thumb: If the insider's paper is really
worthless, then avoid it. Find another's whose paper does hold promise and
honest possibilities. In these small cap stock markets, you are investing more
in the individual behind the play, than the "possibility" of the play itself.
Ask yourself before speculating: Could I lend this person $5,000 for a year and
hope to get it back? If not, then don't! The truly sane and only somewhat safe
solution to all of this:
FIND GOOD COMPANIES IN WHICH TO SPECULATE AND GET INTO THEM AT THE GROUND FLOOR
LEVEL.
Anything else is criminal or stupid. This is a case where there really isn't a
grey area. It's either Black or it's White. The company and its management are
scamsters or they really intend to bring value to their shareholders.
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