Yep ASIC agreed is a joke. It is not has the powers to act so can't agree with you there however does not have the skills or motivation to act even when there is a clear breach of the law. Personally have confronted them with a few clear cut cases of insider trading or trading with insider information and they have chosen not to enforce the law. In one case they even failed to acknowledge receipt of a complaint .... it came out three months later exactly what I suspected was actually going on yet to date 12 months on ... not a thing ....
Just trying to come up with a way to protect our desire for rewards and quick winfalls from the less than scrupulous operators out there.
Personally want us all to come out ahead. Australian market is very much different from say the US market and different again from the UK market.
Preserving and adding to capital is the name of the game. Have been doing this for an awful long time and whilst I know the "guts" inside and out still learning new tricks that can be played. Unfortunaly even with 20 years plus experience I still would not consider myself an expert, when one thinks they know anything in the market it is usually when it comes back and bites you. On the other hand the investor who has won on three small shares over say a 12 month period tends to consider himself an expert. No way to ensure some sort of protection for misplaced dilusions of compentcy.
On the other hand I am going to come up with a long post with a checklist of 20 questions either yes or no and the probabilities of a positive outcome with the share withinn 12 months. Sure a share may go from 10 cents to 30 cents over the course of a month but depending on several things we can see the actual chances of it ever sustaining the rise with a fair degree of certainty. In fact if you buy a share for 3 times its low over the last 6 months your chances of beig ahead in 12 months time are less than 10%. If the company has had a placement in the previous 2/3 months or is planning one now the share is up at new higher levels again the chances are much diminished. From a series of 20 such like yes/no questions you can ask about any penny dreadful you can come up with a likelyhood of success.
Hoping to come up with the questions over the next few weeks and make them generic so as to not target any specific company but hopefully stopping some of the silly stuff that has reached plague proportions in the Australian market.
When a company relases partial results, compares the results to the worlds best results, then talks about market size for global demand for the product, if the comapny has just had a placement or is currently having a placement, shares are 3/4/5 plus times the low from 6 months ago, looking at the last financials cash left in the bank is less than 1 years current burn rate, has had a shortfall in the previous placement or issue and underwriter has had to buy the shares, discovery is eithier in a foreign country or a field not of a mainstream everyday pruduct like a drug that needs 3/4 years to get thru phase1/2/3/4 trials, has large amount of shares and options 100 mio plus, if it is 250 mio plus, if it is 400 mio plus shares incuding options, do the directors award themselves large bonus amounts of shares, does the admin costs of the company seem excessive say over 350k per 1/4 for a tiny miner, are research/dev or exploration money spent less than the admin costs racked up over say a 6 month period, has the company announced either a stock consolidation or a rights issue with the amount of shares being raised being either well below the current price (25%) or the shares to be issued over 20% of the listed shares, has the income of the company increased by over 40% from the previous 12 months, has the bottom line profit decreased by more than 40% from the previous 12 months.
Almost there as you can see .... needs some refinement but from 20 questions ... if one score say 10 or more I would rank it as a 5% chance, 15 ..... well less than 1% ... if you managed to score 17-20 .... well 0.5% down to 0.01% or 1/10,000 chance.
Thinking about some positives on the other side. If it has announced a contract with a major partner ... subtract one, if it has actually announced a dollar value of the contract subtract one ......,
Thing is people will use their own interpretation to cheat. I remember a small telco announcing a contract with a foreign company that was made out to be a big partner, turns out when checking either the partner has only a small market share or in another case the partner who was made out to be a good one had only one client ... the company in question. Its going to become difficult to keep it short so people will actually bother checking a company before they thro their money away.
More work to do ... obviously
cheers
ASX Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
(20min delay)