BIG 0.00% $2.22 big un limited

I'm just trying to be objective about matters share holders...

  1. 75 Posts.
    lightbulb Created with Sketch. 21
    I'm just trying to be objective about matters share holders (existing & potential) can control. The reality is, trading is presently suspended. There are two groups of people: existing share holders presently holding BIG shares, & potential share holders who are not presently holding BIG shares. Once trading resumes, assuming it resumes, these groups can ask the following questions about matters that are in their control...

    Existing shareholders:
    Do I sell my shares? Do I buy more shares? Do I hold my shares?

    Potential share holders (ignoring short positions):
    Do I buy shares?

    Obviously, if trading never resumes, then it's out of everybody's hands & existing share holders will lose all of their money. But since that scenario is outside of anybody's control, there's no point whingeing about it.

    So how do the two groups answer the questions they have control over?

    Of the potential share holders, most will likely choose not to buy the shares (at least initially), so there is no down side to them. However, there is likely to be a small number willing to take a punt on the off chance that it might sky rocket, in which case they will have nabbed a bargain. These people are gamblers & don't really care about any down side because they are willing to take that which they perceive as a small risk for the possibility of being rewarded on the up side. So neither of these subgroups really care about the down side, though the gamblers are hopeful about the up side. So how will the market sentiment affect them? If the market sentiment is negative, less gamblers will enter the market than if the market sentiment is positive.

    Of the existing share holders, most will choose not to buy more shares. Those that do choose to buy more shares don't care about the down side & can be lumped in with the gamblers above. Of the remaining ones, some will be overly focused on the down side & choose to sell regardless. The others will be concerned about the down side, but be open to the possibility of an up side, & choose to hold. So how will the market sentiment affect them? If the market sentiment is negative, there will be less gamblers, more will choose to sell, & less will choose to hold. If the market sentiment is positive, there will be more gamblers, less will choose to sell, & more will choose to hold.

    So which market sentiment is likely to be better for a greater number of people? Is everyone, overall, better off being positive & optimistic, or negative & pessimistic?

    First of all, we can ignore the consequences for those who don't presently hold any shares, because regardless of the sentiment, they don't care about the down side. We can also ignore the consequences for the gamblers who do presently hold shares, because again, they don't care about the down side. But optimism & a positive market creates more gamblers, which is a good thing, because they are happy in their gambling, regardless of the consequences.

    Secondly, because optimism creates more gamblers, they create support against a falling SP for those who do wish to sell regardless. So optimism & a positive market sentiment is also good for those who are definitely going to sell. Though they have given up on the up side, optimism & a positive market sentiment mimimises their down side.

    Thirdly, for those who aren't sure whether to sell or hold, optimism & a positive market sentiment will make them hold, whereas pessimism & a negative market sentiment will make them sell. If they hold, & the company goes under, they will lose their invesment, but if the company does well, they will benefit - i.e. there is both a potential down side & a potential up side. If they sell due to pessimism & a negative market sentiment, they will be selling into a crashing market, as there will be more sellers, & less gamblers to provide support, crystallising their losses in a self-fulfilling prophecy - i.e. there is only down side.

    Any other scenario is outside of anybody's control, & therefore not worth considering.

    Collating all of the above scenarios, it is clearly better for more people overall to be optimistic than pessimistic about the outlook for the stock. That is my thought process & why I choose to see the glass as half full.
 
watchlist Created with Sketch. Add BIG (ASX) to my watchlist

Currently unlisted public company.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.