You should show more interest in how the big guys play because their actions always impact on your share values. By applying some common sense, it’s not hard to figure out the motives and actions of the big guys. Who are they anyway? They are the investment funds, brokerage firms, finance companies, and wealthy individuals. The big guys’ motives are not different from ours: buy low and sell high, and make a kill whenever possible. Their actions however, are much more complicated because their huge resources give them tremendous latitude and advantage. You are too naive if you think that the big guys act according to the news, company reports, and statistics. Why should they? They can make news themselves by telling the analysts under their employ to paint whatever picture they want. They can discretely call the company CEOs and ask about the latest business orders. They look out to the future, knowing that statistics are about the past with forecast based on past trends. All those information that you’re getting are for public consumption only, not for them. There is practically nothing to restrain the big guys except some rules of the stock exchange and some government regulations that are never sufficient. Market Leader. Suppose I had 100 million or more at my disposal, I would make myself a market leader, not a follower like the public. I would buy low and buy first. After some time, I would sell high and sell first to make a kill. Why should I follow the herd? If possible, I would like to cooperate with one or more rich friends of mine in this joint venture to share the risks and profits. News Maker. Everyone knows that the public responds to news, sometimes to extreme levels like euphoria or panic. The strange thing is that they usually buy when the price goes up because they don’t want to miss the boat. When the price comes down they sell because they are afraid. All I need is to make bad news when I want their share holdings, and good news when I want to let go of mine. How? I would never forget that I had a team of analysts under the employ of my company. They would paint a good or bad picture according to my wishes or hints about certain stocks. Continuous Buy with a Top Target. Making news is only part of my action. My real advantage is the amount of cash I could use. After setting sight on a certain stock, I would quietly buy a significant amount of shares at the lowest price I want. The next step would be to gradually pump more money into that stock to get it to the target price. The time it takes to reach the target varies. If conditions do not turn out good, I’d cash out and find another company. When I pump cash to push up the stock, the price would not go up everyday. The price surge needs to take many breaks to consolidate, sometimes intentional, sometimes beyond my control. When the price comes down temporarily, I would buy some more shares. My risk becomes increasingly heavy as I pump in more cash to fuel the price surge. To insure against unexpected losses, I would short-sell an amount before a temporary break, and make some more money when the stock retreats. In this way, I’d be able to make additional money every step of the way during my planned price surge. Continuous Sell with a Bottom Target. When my target price is reached, I would start the cash-out process. This usually takes longer time than the price surge. I’d have to get out slowly and quietly in order to protect my remaining share holdings. For sure, I would short-sell more because my intention is to cash out and run down the stock. I would never regret running down a stock that had helped me win tons of money, because I could go back to its previous low price and play again. Competition from other Big Guys. In the stock market, I don’t have to wrestle market share from competitors. There are so many industries and companies for me to choose. On the other hand, there are not that many big competitors around. Although we may disagree on joint action, we know that competition will eventually hurt the big guys. What should I do? I would make friends and consult with other big guys. If possible, we would form a coalition to share the risks and profits. If we don’t agree to cooperate, we’d try to stay out of each other’s way by focusing on different companies or industries. The goal is to make myself (and my partners) a dominant force in a number of stocks so that I (and my partners) would be in a position to drive the price. For more information, please email stockfessor@comcast.net