Wednesday, April 20, 2011

Demand

        "The price is doing something weird in my penny stock". Of course it is, its a penny stock. "Its market makers manipulating the stock price again!!" No it's not, penny stocks are extremely volatile and not for the faint of  heart. I'm sure that market makers can sometimes be the cause of some weirdness. But on the whole, basic economics drives the prices.The stock is not getting enough attention.  Press drives interest - interest drives demand - demand drives volume - volume drives price. 

        Media, without enough media coverage a stock is not going to be seen by as many potential investors.

        There are several kinds of media at this level, company PRs, technical events, Op. Ed. articles and what I like to call Board Consensus. Board Consensus can be defined as a group's opinion on the current direction of a stock. This group is identified by internet location and size. There is also Board Competition. Two different boards could have differing opinions based on the boards collective  due diligence. And the topic strings on these boards can sway potential investor opinion as new investors to a stock research what is being said about the stock. Board coverage can be hard to study but there are tools on the web that will help research.

The hard part is gathering the data and sifting through it quickly and efficiently. At this point most of of the analysis has to be done by hand, but what can be done to change that? Are there ways to increase the efficiency of research on the less data driven aspects of a stocks quality?

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