Not sure that's a good example, The Fool and Seeking Alpha are far from having records that beat the SP500.
Does Muddy Waters take positions before its calls ?
- Thread starter trade2live
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Not sure that's a good example, The Fool and Seeking Alpha are far from having records that beat the SP500.
OK, but suppose the SEC is to legislate (as trade2live suggested) that Muddy Waters is not allowed to selectively distribute their research to clients before the general public.
How (and why) can they possibly make that distinction between Muddy Waters and any Motley Fool / Seeking Alpha author?
Does it also apply to Citron Research? Rick Pearson? The Street Sweeper? Bronte Capital?
Where do you draw the line, and how, and why?
Does it apply to articles advocating long positions as well as shorts?
As mentioned in this thread before, they had 3 'misses'. If I release false rumors (presented as facts) that a stock is a fraud and bombard every news source with my 'paper', you think that's ethical? They have an agenda but are presenting it as authentic reporting. It's fine by me when they are right but when they're wrong, it's a huge issue.
It's not that Chinese companies are all frauds but it's that they're an easy target, the SEC or any government organization is sure not to get in the middle of that. Now if they tried to do the same on Halliburton or similar, you'd see them shut down in a day.
Of course they've had three misses, but it doesn't matter that much because they've had 5 clear winners.
Again I don't see what the issue is with presenting a report that outlines why they think a company is a fraud. If they're wrong (EDU, SPRD and so on), then the stock will recover. If someone is long NQ, and they disagree with the report, they should welcome its publication, because they can buy more at much cheaper prices.
If Muddy Waters is wrong too many (more) times, then they will start to lose paying subscribers, and also stocks won't move as much in the future when they release other reports.
I don't see how the SEC could prosecute Muddy Waters (or anyone else) for reporting their research opinion. It's exactly that - an opinion. An opinion backed up with an 81-page report.
Exactly what law or SEC rule are they breaking?
Ha you're all fools. I know who muddy waters is.... he was a few years behind me in high school. His old man was a stock manipulator and had some questionable business dealings.
Rather than play the pump and dump game which draws the ire of the SEC, much better to play muckraker and short the piss out of the frauds. My guess is that he knows who the frauds are by virtue of who walks into his old man's office!
however, as has been mentioned before, this is no different than ackman or einhorn talking their books. You just need to be careful who's on the other side of the trade.
herbalife for example.... essentially is a ponzi scheme. I remember a bunch of years ago being invited to one of these ponzi events by some chick I was trying to bang. This was in the early stages of the company and the meeting was at the 5th ave. Penthouse of some clearly wealthy older couple. I didn't join nor did I bang her but what always stuck with me was the pperceived level of the people involved in these things. Its almost like an inside joke... kinda like madoff.
ackman messed with wrong guy, Icahn, otherwise hlf might be in the toilet too.
and before you get mad at muddy waters... get mad at yourself and whoever led you into this dog with fleas as they are probably low level operators of the same cabal.
Rather than play the pump and dump game which draws the ire of the SEC, much better to play muckraker and short the piss out of the frauds. My guess is that he knows who the frauds are by virtue of who walks into his old man's office!
however, as has been mentioned before, this is no different than ackman or einhorn talking their books. You just need to be careful who's on the other side of the trade.
herbalife for example.... essentially is a ponzi scheme. I remember a bunch of years ago being invited to one of these ponzi events by some chick I was trying to bang. This was in the early stages of the company and the meeting was at the 5th ave. Penthouse of some clearly wealthy older couple. I didn't join nor did I bang her but what always stuck with me was the pperceived level of the people involved in these things. Its almost like an inside joke... kinda like madoff.
ackman messed with wrong guy, Icahn, otherwise hlf might be in the toilet too.
and before you get mad at muddy waters... get mad at yourself and whoever led you into this dog with fleas as they are probably low level operators of the same cabal.
As long as they disclose their positions and they don't knowingly publish lies they aren't doing anything different than ackman with herbalife or Icahn with apple.
how do you know they weren't mislead? how do you know that they didn't draw the wrong conclusion from the facts they had. if investors wish to act like a herd, which is a basic instinct, this situation is similar to most investment decisions.
"It's not that Chinese companies are all frauds but it's that they're an easy target"
cry me a river about ethnic discrimination. if they are an easy target it is because a fair percentage are frauds. not "all"blacks are muggers. not "all" gypsies" are robbers. remember if an attractive gypsy woman plays up to you, she wants to pickpocket you. live with it.
I'm not sure what your definition of 'pump and dump' is, but if you mean to (1) take a position and then (2) publish investment research about that position, then I don't see what's wrong with that.
I remain confused as to what's wrong with publishing research (or talking one's book) about positions that one has.
Does that you mean you agree that "this is no different than ackman or einhorn talking their books" ?
If so, does this mean you also take issue with Ackman and Einhorn talking about positions they hold?
If they acqured such a large following that each time they issue a report, there is a significant move in the stock, the SEC should establish rules in the way these reports/opinions are issued.
When you see the move in NQ, I don't think that is acceptable if you want a market trusted by investors. Their report might be accurate and all, but they have such an impact that everybody starts selling and probably HFT massively so, literally obliterating the stock. I don't think that any one analyst should have that kind of power especially if they take a position as well. A HF would get into serious trouble if they did was MW was doing, seems like MW is a research firm so they are not scrutinized as much.
And it's the same to some extent for Ackman, Icahn etc (although I didn't follow the Icahn Apple thing) I have always thought it was very lame for someone to talk their book and especially for a HF manager to pump his positions with the help of Maria Bartiromo, and the SEC should issue strict rules as to how this is done.
When you see the move in NQ, I don't think that is acceptable if you want a market trusted by investors. Their report might be accurate and all, but they have such an impact that everybody starts selling and probably HFT massively so, literally obliterating the stock. I don't think that any one analyst should have that kind of power especially if they take a position as well. A HF would get into serious trouble if they did was MW was doing, seems like MW is a research firm so they are not scrutinized as much.
And it's the same to some extent for Ackman, Icahn etc (although I didn't follow the Icahn Apple thing) I have always thought it was very lame for someone to talk their book and especially for a HF manager to pump his positions with the help of Maria Bartiromo, and the SEC should issue strict rules as to how this is done.