Actually, the moral question may not be fair... but, let me share anyway...
I received an email this morning from NIA, National Inflation Association, to which I subscribe. I subscribed because I wanted their opinions on inflation, not on purchasing stock which was the sole purpose of this morning's email.
NIA, it seems, has purchased numerous shares in, Ocean Power Technologies (OPTT) and they did so when the stock was selling at $3.267/share; however, the price has fallen to $2.38/share. NIA states in the email that they plan to sell all their shares in the company once the price returns to $3.267 so they can claim break-even (I guess?) and get "out-of-dodge."
However, their email, which goes into elaborate detail about OPTT has the intent of encouraging the reader to buy this stock, and in so doing, will cause the price of the stock to rise which is all fine and good...
but if NIA believes in this company so much (that it is risking its reputation by sending out this email), then why, please tell me, do they (NIA) want to sell all of its stock when the stock price returns to their (NIA's) original purchase price???
6 comments:
They are stuck on a dime. Get as many people to bump the stock back up and then sell it. So the people buying low sell high and the people buying high get out of it. Someone made a lousy decision, most stock selections are lousy, but is trying desparately to cause the stock to go up. That is also influencing the value of the product which in this case could just as easily have no value.
The trend on this stock has hovered around $3 for some time and so someone's opinion to buy isn't going to have that much of an impact on this price. If still above $2, this can be considered normal variation. Expectation is for this stock to eventually get to $11, so a recommend to buy is a good recommendation based on what the experts are saying, not on this recommendation to buy.
Was curious WHY you would follow an "inflation" group right now. So I watched a 20 minute (plus) video about their beliefs. Interesting.
We DO have inflation even if the government says we don't. Those of us who try to get by from day to day know how much everything is skyrocketing in price. We should see a turn around in these prices if there is a second dip recession. I really don't see high inflation in the cards for immediate future.
I do not see high inflation in the cards for us either, right now; but, global scarcity could cause inflation to rise, so I follow NIA for a what if perspective(s). For instance, China's economy is growing while our economy is flat. Their growth could cause a shortage in US, and if that happens then prices will escalate which is inflation without growth for a counter balance - dangerous combination...
There IS inflation but depends on where it is located. For the U.S. our inflation has been with food, energy, and health care. Just happens to be those things most of us all are using our money for. So to the individual there is tremendous inflation. As far as I am concerned, you can blame QEII for all the speculation in commodities and why so many of those costs are up. They won't continue, however (except for health care, which is inflated and continue to be so because of all the government money being poured into it).
There IS very much a pending inflation potential for this country because of all the money that is being held back by banks and large corporations. Once they start spending, investing, and hiring again, the inflation spigot will be turned back on.
QEII resulted in the printing of tons of U.S. dollars, and the banks put that money into the hands of speculators, all wanting to make a quick buck. None of it going into investment and creation of wealth. I am not an economist but this much I know. When governments print exess money this will cause eventual inflation in that currency. UNLESS you create wealth to support that extra money created. We are not currently doing this. We are at an important crossroads as to what to do with all that money. We can invest that money and create wealth with it, or let it just sit there as it is now (so not creating inflation at the moment), or we can speculate on commodities such drive up prices that are difficult to bring down again, and while doing so the corporations get richer as they skim off the cream. But it won't be until that money gets in the hands of more people that you will begin to see general inflation again. But that inflation will be minimized if we create wealth with it as well. Just how the law of economics works. And, yes when commodities become scarce, this too will create inflation UNLESS you can replace them with alternative resources, also known as creating wealth. We focus too much on "money" thinking this equates to wealth. It does not. It is artifical wealth which we have just seen and why we are in a recession. We need to place more focus on the creation of wealth. That is done in part by investing in education, new technologies, finding alternatives to resources that are becoming scarce. Right now the mindset in WDC seems to be on cut, cut, cut; including education and good investment for alternatives.
Oh, and I forgot to mention that cost of education is experiencing inflation and is about as great as health care. This too could be because of government dollars being poured into it.
Where we are going wrong is that we know education and good health are part of the common good, but what we don't do is put on our thinking hats and use reason to determine how that money is best spent in these programs. Our typical approach is just throw money and more money at it hoping it will do some good.
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