This summarizes the classic economic debate of our time and ironically is the same debate we went through in the 1920′s and leading up to the Great Depression. Had government followed Hayek’s philosophy, the Great Depression would’ve likely ended after only a couple years, rather than FDR’s Keynes approach which prolonged it for a decade
Read the original:
Fear the Boom & Bust
On May 17, 2010, I witnessed one of the most sedate days I’ve ever experienced on the market. I operate in the world of penny stocks. Those stocks traded primarily in the Over the Counter Bulletin Board and Pink Sheets markets.
The volume had dried up and everyone kept saying it was due to Europe’s bailout package of the so called PIIGS nations (Portugal, Ireland, Italy, Greece and Spain). I really doubt that since your average penny stock speculator doesn’t play in the same realm as those funds destined for things like bailouts, or mutual funds or even treasuries.
So what do I think caused the dismal volume that day? Simple. The promoters were getting tired. I don’t mean they weren’t working…I mean they were using the same old, same old type of promoting to try to entice speculators into taking a shot on their particular deals.
Let me give you an example. On Friday May 14, 2010, one of the best known and followed email lists in the business profiled a little company that hadn’t traded all that much before. The company, ticker symbol ECRY.OB, shot up from around $0.50 to over $0.70 and traded almost 3 million shares on the day.
On Monday May 17, 2010, the same list put out an alert on another company FLPC.OB and traded about 400,000 shares up to $0.78.
Both are good companies, so what accounted for the difference in interest? I contend it is the promotion. ECRY.OB had, and still has 30 second commercial spots airing on CNBC. It also is an Alliance Partner with Research in Motion (NASDAQ:RIMM). In short, it is doing the right things to convey a sense of stability in a volatile world on an even more volatile trading exchange. In short, it is doing things differently, counting less on faith and more on substance.
No one in their right mind would advertise on television and invite that kind of scrutiny unless they knew they could stand up to the scrutiny and ensure their claims were genuine. I haven’t seen a penny stock advertise on TV for a very long time – years in fact.
So what kind of measurable impact did this have on speculators? On day one of the promotion, the stock traded huge volumes. On day two of the promotion, May 17, 2010, when other issues were struggling for any type of volume, the company managed to trade close to one million shares. Liquidity is the lifeblood of any exchange and promoters provide it on the penny stock exchanges.
Lets face it, liquidity is the name of the game. That’s the whole reason people invest in stocks rather than real estate. So they are liquid and can get in and out at their convenience. Put another way, what’s the point of being invested in anything, even a stock, if the price of that investment keeps going up, but you can never sell it or monetize it in any way? It is absolutely useless.
Penny stock promoters who provide that liquidity deserve our respect. They are the ones allowing efficient functioning of the market.
See the original post here:
The Sedate World of Penny Stocks
At the same time some consolidation was also seen in some selective stocks across the bombay and national stock exchange indexes like the nifty and sensex . The week started with the important support The Indian Equity Markets remained ..
Read the rest here:
Current Indian Stock Market Scenario for Stock Stock Stock Nris in …
BSE is the oldest stock market in India.
See original here:
vici blog » Blog Archive » Indian stock market (William Berg)
Two years ago, we launched the CS 21 Net/Net Index, the first index designed to track net/net performance. The index was cap weighted, and comprised of the 21 largest net/nets by market cap at the time of launch. We had a few restrictions on inclusion in the index, including average daily volume and price, but otherwise, this was a very simply constructed index
The rest is here:
Winding Down The Cheap Stocks 21 Net Net Index; Outperforms Russell Microcap by 1371 bps, S&P 500 by 2537 bps
Erasing early gains, the BSE benchmark Sensex fell at mid-session today losing over 73 points as funds indulged in squaring up their pending positions on the last day of the current month derivate segment amid concerns that the … The wide -based National Stock Exchange index Nifty fell by 23 points to 4835.60 at the same time. Brokers said selling pressure gathered momentum as speculators indulged in squaring up their pending positions on expiry in current month contract …
Continue reading here:
Sensex erases early gains to fall at mid-session | NewsX
Gold. Everyone’s talking about it, and a lot of people are investing in gold and gold stocks. Even gold penny stocks are doing well. But is gold really a golden opportunity?
I think it is, and here’s why.
You have countries like India and Sri Lanka and China buying gold from the IMF like it is going out of style – it is not really, but much better than holding the alternative – the US dollar. India actually started the buying rally and is being hailed as a visionary as the price of gold has risen spectacularly since its initial buy.
Which brings me to my second point: the Fed. The US Fed is printing greenbacks like they’re free – which they might soon be – leaving gold as the only viable investment option for the conservative investor.
And lets face it, by historic, inflation adjusted prices, the price of gold is nowhere near its 1980’s high. Adjusted for inflation, the price of gold would have to hit $2300 per ounce to match it.
Also several major companies like Barrick and Newmont are eliminating their hedge positions in gold – a huge economic endorsement for the price of gold since it essentially means that the price of their stock will now reflect the price of gold. (No more hedging, get it?). For example, in the very recent past, Barrick was known as having the largest book on gold hedging. It did this to protect its cashflow from unseen fluctuations (read decreases) in the price of gold. So with a hedge, if the price of gold were to decrease, Barrick would already have received a higher profit by pre-selling. With a price increase, it would have lost extra profit, but the hedge would have ensured its profitability.
Now with no hedge, Barrick essentially is betting that the price of gold will rise. Without a hedge, as the price of gold rises, Barrick will capture higher profits since its expenses to mine gold are essentially unchanged. However, if the price of gold drops, it risks cutting into its margins and in a severe case could see losses.
In my opinion, however, large cap stocks are already priced with reserves and revenues fairly stable and estimates readily available. Further, they are followed by so many investors and institutions, that any new demand for their stock is likely to only have a negligible effect on stock price. A small discovery would also have a small effect on stock price due to the number of shares outstanding. They therefore provide no further opportunity to make outsized profits.
So while the world is buying gold, the Fed is printing money and ironically worried about inflation at the same time, the price of gold keeps rising.
The gold market is essentially just that, a market. And as a market, the price of gold is determined by supply and demand.
Gold production world-wide has decreased by nearly 8% since 2001, while the price of gold and gold producers has risen as much as 46% in 2009 alone.
The case for investing in gold stocks, naturally follows the same logic.
To find the current price of gold at any time, just visit www.kitco.com.
And to get our first penny stock pick for 2010, a gold pick no less, subscribe at www.pennystockjockey.com.
See the rest here:
The Case for Gold
The 30-scrip sensitive index ( Sensex ) of the Bombay Stock Exchange ( BSE ), which opened at 17474.49 points, was at 17377.56 points, down 96.93 points or 0.55 percent from its previous close. Around the same time, at the National Stock …
Continued here:
Sensex 97 points in red
The 30-scrip sensitive index ( Sensex ) of the Bombay Stock Exchange ( BSE ), which opened at 17650.82 points, was at 17581.21 points, down 59.87 points or 0.34 percent from its previous close at 17641.08 points. Around the same time, …
Go here to see the original:
Sensex 59 points lower by late morning :: Samay Live
The sensitive index ( Sensex ) of the Bombay Stock Exchange ( BSE ) opened at 16723.96 points and was ruling at 17007.48 points, up 315.48 points or 1.89 percent from its previous close at 16692 points at noon. Around the same time, …
Follow this link:
Sensex extends gains, breaches 17000-point mark (Lead)
