Anyone in individual stocks?

[82CardsGrad]

True but right now is just as Jeff said PR. Starts down and the media says the sky is falling. Then someone says not so fast, and it rockets back up. The sky is still falling, just someone said it might not be and everyone jumped for joy and bought back in.

Yea... Really, once the Fed began it's series of QE, and as long as the market believes the printing presses will remain on, all bets are off and any shread of reality is off the table.

 

[Russ Smith]

Yea... Really, once the Fed began it's series of QE, and as long as the market believes the printing presses will remain on, all bets are off and any shread of reality is off the table.

THat's why I've been buying individual stocks and mostly biotech trying to separate from the masses.

But even that is fraught with WTF moments.

One stock I own on Monday they released news of data results that showed terrific results on a drug. The stock popped briefly from the mid 37 area to 41.25 and then closed just under 40. IN the news if you read the whole thing one of the good parts of the data is that their drug has shown signficantly better results, faster, and with a better safety profile than the most closely competitive drug which is by Glaxo Smith Kline(partnered with another company).

Yesterday GSK announced the FDA had granted them a special status on their drug, and my stock dropped nearly 5%. Why? It made no sense, my stock is on the path for Accelerated Approval. GSK's stock took the alternate route of getting special status which is a midpoint on getting AA. But again, 3 days earlier they released data that shows clearly their drug is better than GSK's. Who cares if GSK gets this status, who cares if they get AA eventually too, the reality is what drug is best and so far all the data says it's NOT GSK's.

But GSK went up and my stock went down because in this market people trade on news that they don't even understand. They don't grasp that if the FDA likes GSK's drug enough to grant them this special status, that's probably VERY good news for a drug treating the same thing, that has significantly better data so far.

 

[jefftheshark]

THat's why I've been buying individual stocks and mostly biotech trying to separate from the masses.

But even that is fraught with WTF moments.

One stock I own on Monday they released news of data results that showed terrific results on a drug. The stock popped briefly from the mid 37 area to 41.25 and then closed just under 40. IN the news if you read the whole thing one of the good parts of the data is that their drug has shown signficantly better results, faster, and with a better safety profile than the most closely competitive drug which is by Glaxo Smith Kline(partnered with another company).

Yesterday GSK announced the FDA had granted them a special status on their drug, and my stock dropped nearly 5%. Why? It made no sense, my stock is on the path for Accelerated Approval. GSK's stock took the alternate route of getting special status which is a midpoint on getting AA. But again, 3 days earlier they released data that shows clearly their drug is better than GSK's. Who cares if GSK gets this status, who cares if they get AA eventually too, the reality is what drug is best and so far all the data says it's NOT GSK's.

But GSK went up and my stock went down because in this market people trade on news that they don't even understand. They don't grasp that if the FDA likes GSK's drug enough to grant them this special status, that's probably VERY good news for a drug treating the same thing, that has significantly better data so far.

The issue is because for the most part there are no people trading anymore, just HFT machines. There are algorithm-reading software programs that take certain phrases from press releases and make tens of thousands of trades within seconds. This sets off other machines that track blips in volume and becomes a feedback loop that makes little sense in the real world.

The Butlerian Jihad is making more and more sense everyday

JTS

 

[Russ Smith]

The issue is because for the most part there are no people trading anymore, just HFT machines. There are algorithm-reading software programs that take certain phrases from press releases and make tens of thousands of trades within seconds. This sets off other machines that track blips in volume and becomes a feedback loop that makes little sense in the real world.

The Butlerian Jihad is making more and more sense everyday

JTS

good point, it's not really people and clearly not individual investors driving the market now it's robo trading.

Still the funniest one recently was when Orchard Supply went way up after it was announced Lowe's was going to buy them out. If you read any of the documentation it was made QUITE clear that OSH owed more than Lowe's was paying for them, but the stock still went up. The next day analysts released stuff that said hello, OSH is going to zero, Lowe's is buying the name and inventory, but the amount they paid isn't enough to pay off the debt. The stock fell like a rock.

I don't remember what it was at, but it's at 30 cents a share right now.