I posted the following some time back...Given some of the...

I posted the following some time back...

Given some of the discussions recently, I thought it worthy of a repost. I have updated a few areas, adding new comment as appropriate.

We have many types of posters...

Of late however, I have noticed particular groups dominate various threads. I thought it might be a worthwhile exercise if we highlighted the types we often see posting on HotCopper;

Main types of posters

Long Positions
Shareholders, perhaps understandably discussing their stocks with the view of remaining in touch with the markets and fully informed, as they share their views on their investments with other like minded individuals. Some might feel this is best helped by talking up their stocks prospects, some overtly so, whilst others might adopt a more sanguine or even handed approach, preferring to canvass both the pros and cons of their stock with equal measure.

Short Positions
Those who want to become shareholders, or those short on a stock...or maybe those who have simply temporarily traded out of a stock...who collectively, want to buy back in at lower prices. This group basically want to see the stock price fall and will usually talk down the stock in question, sometimes overtly othertimes in a more measured way, by posting negative comment at every opportunity...at times this can even be manufactured. This can range from genuine opinion that the stock will fall, with decent supporting argument, through to outright manufactured negativity at every opportunity. In essence, this group is the exact opposite of the first group mentioned above, but follows a similar basic posting pattern.

Swing Traders
Traders...who will swing from positive to negative posting styles depending on their position...usually adopting one or more of the above two posting scenarios, depending which side of the trade they are on. Some of these people use multinics to swing from one posting style to the other.

Lurking Interest
General market observers, or those with an interest in the market but not necessarily stock specific (such as journalists, students, retirees not directly in control of their investment stocks, etc)...who either scan the threads for a general feel for the market, be it for general knowledge, or in the case of journalists and/or market commentators, potential stories, or those who are using the retail market as a barometer of the wider market sentiment. These people, generally, are over represented as the silent majority...reading but not contributing...for any number of reasons.

Offical Company Reps
Hotcopper now sanctions official posting from sanctioned Company representatives...this is an excellent development. Here we have a group, clearly informed, with a goal of ading a further level of communication access to the retail market, beyond official ASX release, that has previously only been enjoyed by well connected, sophisticated and/or broking comunity. Clearly they cannot share information that has not been officially released via the ASX first, but they can help posters understand what has been released and help prevent the types of misinformation campaigns we see on some threads.

Evil Doers
Then we have those with vested interests beyond mere shareholders...or potential shareholders...or sanctioned company representatives. In this group I include market hierarchy types, from brokers and fund managers through to majority shareholders and Company reps...even CEO's secretly posting...whose agenda is generally focused on the health, or perhaps generating a lack thereof, of a particular Company's share price. Their interest can be genuine and with moral grounding, or it can be sinister with evil intent, such as we might expect from a typical "boilr room" sting. Posting styles at any given time can vary, driven by all manner of corporate incentive be it placement related, financially motivated such as at options expiry times, or indeed linked to various other forms of corporate chess such as mergers, take-overs and/or JV's. Here we have well informed, typically intimately connected individuals, effectively seeding the threads with various snippets, from positive to negative depending on their agenda. One might argue, with the intention to deceive and dare I say, manipulate the market in a particular stock for a specific purpose...good or bad.

This latter group, in my mind, is perhaps the most sinister of them all...for the simple fact they prey on the wider ignorance of the non-connected retail market...thats us...to achieve their goals.

I guess all we can do as "retailers", when faced with the task of determining the nature of any post, is ask a simple question...

What does the individual stand to gain from their "efforts" of posting what they have...and with this in mind, how does the posters "efforts" relate to their possible motives for doing so...and finally, how much genuine, quantifiable supporting data has the poster supplied?

In this regard, we must also be mindful of the sentiment statement at the bottom of our posts...of course here we must assume people are being honest. Of course if they are not, and any form of investigation into their trading takes place at any date in the future, a clear intention to deceive can be easily traced back to our positions when we post. So...assuming honesty here, it is important posters are aware that "no position" does not necessarily mean the poster does not stand to gain or lose, if a stock moves up or down. Whether one is long or short on a stock, or even being remunerated in an indirect way depending on the stock price rising or falling, their sentiment should always read "position".

I fear this is a subtle issue which allows those short a stock, who select "no position" as their holding statement, to achieve a falsely supported level of credibility from other posters, who assume in not holding stock they are posting unbiased comment.

Bzzzzt...wrong...I suggest ANYONE who makes post after post on any stock, up, down or sideways, clearly has some sort of vested position, what ever form that might take. Whilst this is clearly a generalisation, it is fair to say most of us would NOT spend out entire days talking down the prospects of any stock we do not hold some sort of position on...or stand to make financial gain from...period?

When we look around the threads, we see they are littered with these types, posting negative comment over and over, with no apparent position in said stocks...and their posts strangely increase when said stocks fall, or come under selling pressure. I suggest these posters are simply the second type above (Short Positions), who stand to make as much with a stock falling in price as investors (or long positons), do with a stock rising.

To make money, shorters need others to lose money...this is why I dont like them. In long positions, everyone makes money and whilst the Company keeps growing, and adding value, everyone will keep on making money. Add dividends to this and even when a stock's price stagnates at the top of its growth/price range, dividends can still make everyone money...even the guy who paid the highest price.

In rising stocks with good growth stories, value is effectively created from nothing...all shareholders get to share in it. When it comes to shorting however, typically the majority must lose money so a few can gain!

For mine...if we see a long term shareholder "supporting" their stock, whilst we may or may not agree with their views, as onlookers we can at least understand why they are doing so...there need not be any sinister motive, other than a genuine desire to see their stock, and the value of their investment, doing well. Such posting does NOT set out to rip others off, reduce the value of portfolios, or make money out of the losses of others.

On the other hand, when we see those apparently not interested in a stock spend countless hours "talking it down", I for one find it very hard to relate to why they would do such a thing in the first place? I mean...who would just go out of their way to hurt other investors...or a Company's value prospects...by talking it down, especially when they do so repeatedly...and apparently for no personal gain?

Now, before we get the usual..."we all have a right to an opinion and don't have to be a shareholder to form one" type arguments...I absolutely agree and even accept we will get the odd "Good Samaritan" posting on various threads from time to time for what eer reason...to "save us all" from ourselves...but...and it is a big BUT when you see more than one (or even groups), posting in a similar way ON THE SAME STOCK...over and over...well I for one suspect we are reading posts from people with vested interests way beyond mere shareholders.

We need to be very careful of this latter group in my view...although there is a positive here in that such posters may serve to highlight certain activity possibly unfolding behind the scenes in certain stocks...but once again, we must take care to do our own research.

Hotcopper is a great source of information, but it can also be bad for one's financial health. At the end of the day, all we can do as posters is to use our heads...read everything on here with a healthy degree of scepticism and be very aware there ARE people posting on here with direct links to all manner of stocks, who DO NOT disclose this fact, yet continue to post predominantly to meet a very specific, financially driven agenda.

Please always beware of who might be posting...and why especially if they are impacting your investing decisions in any way...and for gods sake realise that many do not post factually!

Cheers!