“Hello my name is Jimmy and I’m a manipulator.”

“Hi Jimmy.”

It is the worst crime known to the HSX community. To be pegged a manipulator of stocks and bonds is to be shunned by your peers. To lose your respect amoung traders. And in extreme cases, to manipulate yourself into a lifetime ban from HSX itself.

But I raise the question, “Aren’t we all manipulators?”

Anyone who writes a column. Anyone who posts on Ticker Talk. Anyone who visits #hsx on irc. Basically, anyone who has the guts to stick their neck out and voice their opinion.

I think that we overuse the word “manipulator”. For example, a TT post states, “STOCKX is dirt cheap at $5.00!” Eventually someone will post a reply to the affect: “Maxxed on STOCKX are ya?” Perhaps they are. Ok, most likely they are. But is this manipulation? To a point. But how is this any different than someone asking for an estimate delist price (EDP) for STOCKX and receiving a value higher than $5.00 in reply? It isn’t. Do we now accuse the trader who supplied the EDP with manipulation? Some may think so, but I disagree.

I would call both cases simply a matter of personal opinion. Perhaps such statements will cause a stock to move in price, but I believe this is due to a number of people agreeing with the posters opinion, rather than traders blindly following whatever the poster says.

Don’t let me mislead you. Yes there are people who will post just to see their ports rise in value. And being an honourary newbie I know we hinge a lot of decesions about buys and sells on what more experienced traders think. It is quite a transition for some people to become a leader from a follower. So be smart. Ask for reasoning and evidence to support claims. Then make your own decisions based on what you feel in the cockles of your heart. Maybe even below the cockles. Maybe in the sub-cockle area.

And what happens to poor old trader X who gives advice that turns out to be wrong? (Like say, holding SMPLY on its opening weekend? Ouch. Sorry.) Don’t go back and tear them down for making a mistake. Also, don’t dismiss them as useless commodities. Perhaps you’ll miss when they give good advice (like saying to hold VRSTY) that could result in a lot of money for you.

But I’m starting to ramble a bit. Back to the subject at hand, manipulation.

Ok, show of hands from everyone who has ever given advice to someone, somewhere, at some time about stocks and bonds. Let’s see…everyone at the fansites…the folks at TT…even our good pals at HSX. (Max Broker has a tremendous influence on the market. If he has a column promoting or bashing a stock, look for its price to move.) I just have one thing to say. You’re all manipulators.

“How dare he!?!”

“The nerve!”

“Why…I’ve never manipulated anything in my life.”

Ok, calm down everyone. See how that “m” word can get all of our backs up? But have you ever stopped to think how your advice affects the market? You believe that STOCKX is underpriced. You let the community know your opinion. People agree. The price goes up. You’ve caused this price hike. You’ve manipulated the market. Do you feel bad about it? “Hell no! I didn’t try to manipulate the market, it was just a by-product of my opinion.”

“By-product of my opinion.” I like that. Let’s look at a solid example.

When I first started this game I would head to Size Matters column over at the Trades every week for advice on IPOs. As far as I was concerned, what Size said was gold. What he recommended to buy I bought. What he said to avoid, I did.

A while later, as most of you know, I wrote a program to count transactions of IPOs on the HSX ticker and made decisions based on those numbers. Now, the results of the counts were sometimes more accurate than Size’s predicitions, but they both lead me to the same thought. Were we correctly predicting the market, or were we actually influencing it? Would stocks have behaved the way they did without our intervention?

Hard to say really, but I believe we were leaders in what can only be called “inadvertent manipulation”. I’m sure Size didn’t sit down every week and say “Hmm, I wonder which IPOs I can get people to buy this week?” And I wonder if IPOs like DFOLE may have perhaps adjusted differently if my counter wasn’t around to make people second guess buying him.

I’ve made a long case out of a short point. Stating your opinion is not manipulation. I believe the only true forms of manipulation are the buying and selling of stocks and bonds in multiple ports, solely for the purpose of changing the value of said stocks and bonds to your advantage. Or providing false information to influence the market for your own profit.

So take it easy on people who state their opinion, especially if you take their advice and it turns out to be bad. Remember, the only person who can hit the buy/short and sell/cover buttons is you.

Off with their hot pants!
Jimmy Impossible