Spamming: One aspect of Ramping

Saturday, 4th July 2009 10:52 - by Boredmum

People often talk of ‘ramping’. Here, I would like to just talk of one aspect of it which is ‘spamming’. I myself have jumped into shares when someone appears to say that news is coming and the share price is already rising. These people often appear across other threads that have no connection with the said share. Recently I have seen it at work. You tend to see it more on other sites. We do see it from time to time on lse, but ADVFN seems to be prolific for it. A couple of weeks ago I saw it on three shares - three shares that I was either holding or had held, so were still on my watch-list. The shares in question were: Pinnacle Telecom (TIDM code: PINN), Mwana (TIDM code: MWA), and Toledo mining (TIDM code: TMC). I was on ADVFN and, whilst reading the usual threads of shares I held, I was constantly seeing someone say things like “PINN already up 30%. Going to hit 1p. Get in quick”. I also read “Announcement due regarding new contracts. Get in quick”. Now, in the space of a week, I have seen it happen at different times on these shares. The thing is, when you are already familiar with a share movement, then you can really see how this works. I’m sure it’s what GedW talks of when he says “Efficient Market Theory”. Everything known about a company is already factored into the share price, so when an unnatural event like ‘spamming’ takes place and more people buy in, the share price reacts and rises. This means the share price has risen unnaturally, so there needs to be a correction. When the share price then lowers, people are either trapped or sell at a loss. Unfortunately, only the ones who do the spamming in the first place are quick to get out near the top. These people have done it many times before so they know how it works. So please be careful and if you do go for the ride. Get out quick and ignore the crazy price predictions people are making.