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Friday, 26 December 2014
Operators of Certain Companies
This blog post is contributed by Tobi Damaris
This is what I think. Let me share my thoughts:
I remember when I was a foreign exchange student in Guangzhou more than a decade ago. While I was walking I saw some people gathering around in the corner of the street. They were apparently doing some street gambling. The gambling is quite simple, it required only a cotton string, a smart brain and a flock of friends.
So the way they cheated people is something like this:
the main person who performed the trick would arrange the cotton string on the ground in the form of 2 holes. You place the bet, choose either first or second hole by putting your index / middle finger in it, when the performer pull the string, the string will either grab your finger or miss it. If the string somehow grab your finger, you win the bet.
But to made this trap worked, they needed to work in group.
So the other 3-4 people were pretending as bystanders and acted as if they joined the game. Of course when they place their bet the performer let them win, they are his own friends. But when stranger joined in and thought will get a easy money, the performer would “eat” the money.
I was one of those strangers. I lost 50RMB.
Same thing applies in s-chips. The operators of these chinese companies know that most of us are just retail traders who know nothing about the nuts and bolts and just want to get some extra bucks.
They know that when we see some s-chips counters whose price rose from 3 cents to 5 cents would think “wow, I can’t miss this one.
Die die should try.” So without checking whether this company making profits or no, without checking whether these companies have any representative office in Singapore or no, without
checking whether these companies have any official website or no, without checking whether these companies incorporated in Singapore or no, they just put their bet in their stocks and hopefully the stock price will rise.
The result is:
sometimes it rise, sometimes it doesn’t. Most of the time the operators just lock-in their money inside and after gained enough capital / reached their certain amount of goal, they will intentionally set the price lower to certain
level. Seeing this, inexperienced retail traders, whose goal is just want to make a quick buck, start to panic and they sell their share with a loss.
Retail trader loss money, the operator of these stocks gain money. And as soon as the retail traders sell their share, the price rise up again! And this circle goes on and on and on…
Anyway, this is just my thought. Maybe I’m wrong though, because I’m just a beginner, only trading for less than 5 months. But most of my losses can be traced back and all thanks to these so called s-chips. Thanks for reading.