for more information about stanelco click on the links.

driver's research page link
http://www.moneyam.com/InvestorsRoom/posts.php?tid=7681#lastread
website link
http://www.stanelco.co.uk/index.htm

Sequestor,

I am not sure that shorting does balance the market out. It sure makes certain stocks more volatile. I have copied an article on the topic AGAIST shorting myself and my business partner wrote for lemming investor.

Sorry its off topic people.

Elric Lloyd-Langton
Edward Kalfayan

August 29 2004


Lets cut to the chase, we hate shorting. and do not seek to short any
company.? In particular we are against Hedge Funds. It took the
losses and rescue of the American hedge fund Long Term Capital
Management (LTCM) in September 1998 to see its great scale and
destabilising effect. as a serious threat to the world economy. With a
capital base of some US$4-5 billion, LTCM was able to obtain loans
of US$200 billion and used these to place positions in financial
markets worth $1,300 billion. LTCM had to be saved from collapse by
intervention of the US government to avert a US meltdown, and
through knock-on effects, an international one.

After the dot com boom there was a period when it was nearly
impossible to make money by buying a share, however well the
company was performing. Frustrated investors took advantage of the
new instruments formed for leveraged trading - CFDs and Spread
bets- and turned them upside down to make money in the only way
possible - by shorting. They got a taste for it. The hedge funds then
followed the eccentric individual investor, turned punter, down into the
small caps, with damaging consequences..

Just over 12 months ago; many ordinary folk who have worked hard all
their lives, fully expecting to retire, found that their pensions were no
longer worth the value originally projected, and were forced to put
back their retirement plans. A long term downward spiral exacerbated
by the hungry bear squeeze, was a relatively new phenomena.
Pension funds and endowments were under performing, why? These
funds allocate assets to hedge funds. These same hedge funds were
using the shares loaned to them by pension managers to short the
very companies that the pension managers were supposedly
managing for PIs and institutions alike, effectively giving the keys to
the burglar.

There is not much point in minnows railing against this activity on a
global scale; but we can usefully point out the threat to small
companies in the pre-commercialisation stage, when making losses,
or still worse, when researching or designing, and without turnover are
at their most vulnerable. Some will argue that short selling offers the
astute investor a chance to buy at a discount after shorters have
ravished a company, But these companies contain the seeds of our
future. They have enough difficulty managing their way into profit
without having investor support destroyed by volatility as well. Why are
we allowing such practices to continue when so much damage can
occur?

Shorting may be fine when dealing with large bodies like a Footsie
stock, or a currency, because the activity at the private investor level
does no harm to the share price. When a previously profitable
company suddenly performs badly or dishonourably, shorting can be
just arbitrage of an inevitable price fall and does no net damage. It can
be likened to culling a sickly stag.

But when dealing with an innovating small cap with potential,, a large
short - using borrowed shares as in a spread bet or CFD,- reduces
the share price against the true reflection of the business, and sends
out a false signal. The private investor is then led to believe that
something is wrong ,which is not yet in the public domain. Such a
person is thus deceived into selling his shares below true market
value, and these are then bought back by the shorter at a lower price -
from which he makes a profit.

This destroys value

It is widely thought on the BBs, that damaging innuendos, fabricated
stories, disinformation, even libel, is being used by private shorters to
leverage out long The situation is made much worse, morally, when
hordes of agitators board the BBs and de-ramp with plausible lies
and distortions ,disinformation and even libel thus driving the
lemmings to greater panic. The ideal victim is an entrepreneurial one,
taking high risk, one with start-up losses, even no income, but high
hope value and therefore trading at a high premium.There is
circumstantial evidence that this value destroying agitation is being
professionally orchestrated by hedge funds, .something which if true,
the FSA will in time be called upon to deal with, for sure.

Shorters this year at 3DM, Proteome, and BioProgress,, drove the
share prices down by around 60%, and over two years at Wiggins by
95%, until all the weak holders had been frightened into selling out.
The shorting only stopped when the downside became too small
against the recovery upside. In each case the price is now recovering
slowly. The shorters have left. . The shorting opportunity is now
reduced since the remaining holders of the stock are resolute and
have mostly topped up since the bottom.. The opportunity to short
again is now less than it was with a virgin investor body.

Wiggins was in our opinion severely damaged by professional
shorters. Little else can explain that for two years the property assets
increased in value - in one of the greatest property inflations of our
lifetime - whilst the share price fell consistently.
Chinese walls are supposed to separate market making for corporate
advice, but BB speculation was rife with gossip that one broker was
persistently reported to be dropping the bid price before other m/ms,
and recommending clients to sell. This was of course a way of
stimulating turnover, but very many Wiggins investors lost 80% of their
capital from it, whilst the broker made their profits. Of course we have
no way of knowing if BB gossip has any validity, the broker is certainly
not going to add any weight to such gossip by entertaining such views.

It is also very probable, but libellous to name names, that when the
Accounting Panel recommended that the Wiggins accounts be
restated, one or two established journalists exploited the damaging
PR Though Xerox and many other plcs were caught by the same
change to accounting conventions of that time, Wiggins was seen as
more vulnerable, and the CEO's origins an easier target for racist and
unjustified character attack. The dog was given a bad name, and
allowed shorting groups to wade in. There was much talk at the time of
the 'North London Mafia' profiting from this discord.

Shorting is not seen as dishonourable in the financial community,
where arbitrage both ways including shorting has a role to play in
smoothing out currency changes. It is the application of this process to
immature companies which we find distressing. The bigger question
for now: is Should the FSA allow hedge funds to continue to
exacerbate market sentiment, and drive down valuations putting future
retirement at such risk?.

The hedge funds, for example the publicly quoted MAN, are
immensely profitable often with 50% margins. This money comes from
somewhere. It is not conjured out of thin air. Value is being extracted
from the national gross asset and consumed in covering the costs and
overheads in these funds. This would be .parasitical on our economy,
were it not offset by even greater predations on the economies of
other countries..

Any number of you could be looking forward to your retirement,
confident that you have done your research, invested your hard earned
spare capital with care, only to learn that a hedge fund has set about
bombing the shares price. The so called expert manager has got his
numbers wrong. The company in which you had your ISA maxed to the
hilt is over valued, and heading for a fall...but to be on the safer side,
the hedge fund can give it a helping hand on its way to the bottom; You
have some hard choices to make.






http://www.lemminginvestor.com

fred , it was posted yesterday. amazing how much influence this ek has. he says he might short and the price drops. then he says he's changed his mind and there begins the turn , with buyers flooding back in. it's quite frightening to think this one guy can have so much influence over our shares. i might start believing in kaizer sauzee next. interesting day. i hope i am wrong and it all depends wether there is any news but i'm not sure this is the bottom.

elrico, scary article!

going long, you make money eventually out of real worth created by a productive and profitable company making reall goods and services - a non-zero sum game.

going short, you merely make money at the expense of other inivestors - a zero-sum game.

did you ever hear the story of the prisoner's dilemma? as far as I recall, it's all to do with enlightened self-interest producing a better result for all concerned than narrow-minded self-interest.

with his tail cut short and his ears cut long (never did uunderstand that bit) oh where oh where can he be?

sd

OH FORGET IT !!
God this is one crap bb to try to post on at night!!!!!!!!

g`night!!!!!!

Going short or long does not effect the intrinsic value of a company. If you bought because of its fundamentals they are unchanged by wobbles in price movements.

Today SEO traded about 3million pounds worth of its shares. Ie. approximately 1.25% of its valuation on to-days price of about 241 million. I do not see that shorters are going to have much effect on the future value of the company.

The owners of over 97% of the shares in the company are happy or prepared to watch and wait.

The only real problem shorters etc. create is if a punter has taken a short term position and while the market makers are keeping their books straight they want to cash in their holdings.

If that is their situation they should question their decision to be in the market or tolerate the pain.

If you buy good stock eventual you will probably get good returns, if you gamble without a reasonable look at the basics you are likely to get burnt. As I unfortunately do some times even now.

You cant change the rules of the game or market because you dont like or it is not of advantage to you,


The market plays big boys and girls games with real money.

PS sorry about double posting.

What do you call a short term position Fred, look what they have done to NLR, it will come back im sure, but they have hammered it.

If you have bought and still hold have courage of your convictions and wait until it hits the price you think it worth, at the least you will be more careful next time when you buy.

Also. if you are worried about shorters buy larger companies where their effects will be less and hedging is used more so for what it was intended, not "gambling". I do not have anything against Hedging going short etc. and at the moment I don't do it, and although I find it is annoying sometimes it is a fact of life.

Yes its just that it ties up your money when that happens,and its dead until it bounces back,,like you say though its now a fact of life..

The majority of us (including myself) are too greedy sometimes.

Yup thats true, probably why i never seem to get out at the top,

PS again there is one major problem though, ie if the company wishes to raise money by a placement etc. because of the deflated price a part of the company is sold off to cheaply and the "normal" shareholder looses on the deal.

jaysus Fred -sccchhhhh!
things are on a knife edge as it is - whatdayawant?-shorters???
SCCCCHHHH!!!

bos
check email

Hi folk; the scousers won the cup! Hooray! Quite amazing match with Dudek quite sensational at the end.

Another day out - had to close a couple of SEO positions before I went for peace of mind's sake; needn't have done it as it turned out. But that's the nature of the game - still a happy chap!

Found some fascinating contrasts in investment / trading style and thought it worth commenting:

andysmith: the ultimate investor! He's bought; he's adding; he has unshakeable faith; he knows the business inside out; he understands the ultimate value.

dynamite: the ultimate trader! I've seen her do it with PDX; she trades the channel; she makes money up and down; not sure that she shorts (I'd like to see her in or out of them, though!) but she knows when to sell, when to buy back and when to take profits.

Sequestor: a two way trader who is extremely confident in his own calls but critical of other stances; he called the sell right on his long; he closed his short with a good profit; he opened another long - time will tell. Hope he learns to respect others and their approaches, including the novice investor.

Evil Knievil: says he has made money out of shorts and longs but suspect, except this time, that they are fibs; certainly made a significant loss on his last short; opened the latest short without calling it as a new trade - his supporters will have got in late and probably lost money.

Eric: caught out by the market move whilst out of action. Had increased his CFD stake using margin generated by the 'buy on rumour'. Felt he had to reduce stake when sp dropped and position went negative (although this may not have been necessary). Also used margin to build up position in ASC and is 15K to the good. Not a problem. All in a week's trading. A strange sort of investor/trader mix - holder long term of SEO and ASC but likes to make extra money along the way and suspect he would do better by sitting on his hands!

elrico: will read the article properly. Don't see any difference though between taking long or short positions, particularly via CFDs. I am neither a positive or a negative investor in the company. Share trading is not investing in the company. The company carries on whilst the shares rise and fall, only meeting the trading community when it wishes to raise funds. I think longer term holders, like andysmith, are investors who own a share of the company; although I do believe in long-term potential of SEO, I am not even trading the shares, I am trading contracts.

Hope this helps others to position themselves on the spectrum, which of course can change over the course of time.

Where from here with the sp? Have high regard for og who is calling a drop back to 20p, possibly 16p. My reason for reducing exposure was that I considered the next support level was 20p; maybe low pprobability but couldn't afford the risk. It may be that a new support level of 24p has been established. Like bos, I am concerned that there is no new positive news, other than the start of the ASDA exclusivity period, sine share was trading between 20p and 23p. I had thought share had moved to a new band between 27p and 30p. It may be that the new trading range is 24p to 30p. Time will tell. Time for a bit of caution.

Eric

morning all. still no follow up news which i find disappointing.

The headline from a Motley Fool Article about why small cap shares may be good for your wealth:


The Small-Cap Risk Myth

In 1980, Wal-Mart sold for pennies a share.
Now it sells for more than 50 dollars.

Had you invested $5,000 in Wal-Mart in 1980,
you'd be sitting on how much today?

ABOUT $2,500,000

PTH

Hmmmmmmmmmmm thanks for the compliment Eric but if I were the Ultimate Trader I would be a millionaire by now....I wish. However, you are right I am trading SEO as I have PDX...the intention was for the long term but when it becomes obvious to me that it is oversold and due for a big drop I sell and buy back more at a lower price. I pretty much keep these shares all the time but drop out here and there. It is a method that has evolved. I wish I did the same with shares like Griffin Mining too. I could have done the same many times but I could not see why anyone would want to sell bearing in mind that full mining is about to commence...Anyway SEO as I have said before has a lot in common with PDX and both are superstars
Di

Morning all

Nice steady start to the morning

Baza