And this brings up a bigger point, long belabored around here that I would like to address with an opinion:
The stock market ecosystem.
Someone once said: "Where you stand depends on where you sit."
So, first we have to see who we have sitting at this table. The market is made up of participants, all with their own agendas, proceedures, biases, and foibles. Let's say:
Control Investors-people who own the majority of shares, and therefore can actually control what the company does and how it does it. Hong Kong listed property companies, among others, are run this way. they are essentially family businesses run by a patriarch.
Management-insiders holding large chuncks of equity who work for the company
OPMI's- that's us. (Outside Passive Minority Investors). we have no control. yes we can vote, but management controls the proxy machinery, so, really we are at the mercy of management. we are invested for the long term, which is vague, so, anything longer than 1 year.
Position Traders- people who like to hold a stock for a full cycle 6 months-3 years, aren't afraid to sell when the party appears to be over.
Swing Traders- hold the stock for days, weeks etc.
Day Traders- hold for intra day
HFT- hold for nano seconds.
OK, what is my point? This list is in a particular order. Holding period, from longest to shortest.
Back to the beginning: where you stand depends on where you sit.
so, if you are a swing trader, it is the higher frequency trading cohort that is providing you with the liquidity to make your buys and sells. a swing trader NEEDS day traders. In my opinion, OPMI's need ALL these traders because they are the ones with their shorter term objectives that provide the movement in the stock that allows me (an OPMI) to do what I want to do. (Full disclosure: I am bullish PTK, I would like to add some the next time the stock corrects.)
looking the other way, how do I, an OPMI, feel about institutional or whales or big, long term holders of the stock? well, we just went through a SERIOUS issue with PNP liquidating a huge block of stock, and it kind of upset the apple cart now didn't it? From our perspective, PNP was an elephant running through our picnic. All hell broke lose, the stock tanked to 70 cents in November, and I am sure some OPMI's freaked out.
so, really, when people who have done their DD and are long the stock, and want to hold to see what this company blossoms into--what's the problem? I honestly don't understand why there is so much angst surrounding the tiny short term moves created by day traders. We are investors, and have the upper hand, because we don't have to close our position, while a trader, who enters a position on monday, is worried all week, because he's got to get out, somewhere, sometime soon.
do you think the lions actually hate and complain about the hyenas (who steal their leftovers)? no, because they are LIONS! let's be lions.
