wonder who is doing this?, page-9

re: nightstalker Here is some interesting info

On the investing challenge in general

A quick whip around soon forums shows that SSI
hardly mentioned... When it is it is often with disbelief
and liquidity is mentioned.. And hence sit on the sidelines

NOW if no one is IN ... There can Only be new buyers
Not New sellers

A strong technical position is one where speculative traders are ABSENT ( wyckoff )

Here is some reasons why low liquidity can be a good sign .... And as I said liquidity is not a given... It changes !!

First some research from academia and second from
a investing practitioner



Slater's comments are apt here I think ... OUR eyes can tell us that there seems to be almost only buyers..

And the liquidity problem (?) soon might be what problem !







Liquidity and Stock Returns: Evidence from a Pure Order-

Driven Market using a new Liquidity Proxy



1. Introduction

Asset pricing is central to resource allocation within an economy. Consequently, a

large amount of literature has investigated factors that affect asset returns. Liquidity

emerged as a determinant of asset returns, starting with Keynes (1930) who proposed

that "an asset is more liquid than another if it is more certainly realisable at short

notice without loss" (Keynes, 1930, p. 67).

The traditional explanation for why liquidity might affect expected returns is a

straightforward one. Amihud and Mendelson (1986) and Vayanos (1998) proposed

that investors anticipate having to sell their stocks at some point in the future and

recognise that when they do so they will face transaction costs. This leads to

investors rationally discounting stocks with higher transaction costs by more than

their low transaction cost counterparts.

Baker and Stein (2002) proposed an alternative explanation that rests on the

assumptions that there is a class of irrational investors who under-react to the

information contained in order flows and that there are short-sales constraints. In

this framework, the presence of irrational investors lowers the price impact of trades

and boosts liquidity, while the short-sales constraints imply that irrational investors

will be most active in the market when their valuations are higher than those of

rational investors. Thus, high liquidity is a sign that the sentiment of irrational

investors is positive and that expected returns are therefore abnormally low.



6. Conclusions

The empirical findings of this study, which has used pure order-driven market data

from the Australian Stock Exchange (ASX) and a new liquidity proxy, Weighted

Order Value (WOV), are consistent with findings of previous studies in this area that

have used hybrid quote-driven market data. WOV, which combines bid and ask

depth and weights orders in the order book by the probability that they will be

executed, is found to have a negative relationship with return indicating the existence

of a positive liquidity premium. This is in line with theoretical papers that

hypothesise that investors need to be compensated with higher returns to hold less

liquid stocks. The positive liquidity effect is found to exist throughout the entire year

which contrasts with one early study that found that the effect is unique to the month

of January. The liquidity effect is also robust to two different time periods and

remains even after beta, size and book-to-market equity are controlled for. In

contrast to the majority of hybrid quote-driven market studies, evidence of the out

performance of large firms over their smaller counterparts and growth firms over

their value counterparts is found. This is likely to be due to the time period of this

study rather than any unique characteristics of the market.

I emailed these comments to some over a week ago
So they are a paste of what I said then

........ some quotes from Jim Slater
A So called Investment Guru who wrote a book on Investing called ''The Zulu Principle".

"If I am going to buy a share I like one that the institutions are not in.Because then they can only buy the stock, they can't sell."

"Investment is the art of the specific and selection is far more important than timing"

"Elephants don't gallop - but fleas can jump to over two hundred times their own height"

I will only note that SSI with only 15,000,000 shares on issue
And moving up nicely ... Without any hype, press coverage or forum hysteria
Is looking the goods ...For those that say Volume is small
Put in to perspective How many companies does 150,000 shares buy you 1% of ?
And the ability to invest a certain amount of $$$ is becoming an easier task as the price moves up..


Two hundred times it's own height ? We will see...

As to the first quote I have seen it expanded to include A stock with No Broker recommending it as well..

I could add No widespread chat room excitement...

Maybe we can look forward to those three things happening...

Trades to date seem to have been small holders looking at the bird in their hand and where the share price was only what ? A month ago.
As always though it is the where to that matters...

And do you think that it is the buyers or the sellers who have a firmer grasp of that ?

SSI must be nearly at a 4 year High......


motorway