VCR ventracor limited

going to 80 cents, page-17

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    michael west australian Market metabolism burns the fat off stocks, with much to exercise the imagination

    December 15, 2004
    BUY the rumour, sell the fact. Metabolic shares ran all the way to $2.20 a few days ago on fevered speculation that human trials of its fat-burning pill might be a success, and that we'd all look like Kylie Minogue.

    Lo and behold, the company comes out and says, yep, phase II human obesity trials went well, the pill works. But what happens? The stock gets clobbered yesterday, down 48c to $1.56.

    The message is that we are squarely in the midst of an irrationally exuberant market which reacts, not to events, but to expectations. If you're a punter, get out before the news. If you're a promoter, keep that news coming, no matter how silly it is.

    In the US, they rule off their books at the end of this month and, usually, a whole lot of new money pours in during January, the markets gap up in fairly illiquid trade. All the gurus are on vacation and big decisions are put off until they return. So it may be the markets keep running until profit-reporting season in February, and until every taxi driver is an oracle.

    At which point, reality should bite.

    http://www.theaustralian.news.com.au/common/story_page/0,5744,11693683%255E16942,00.html
 
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