Short sellers protest

On my blog, Financial Tides, I try to teach you that you need to take a disciplined and rational approach to managing your portfolio. My approach is very simple, I don't charge for using my system and updates are free and can be read on multiple sites. I want you to take charge of your own future. Use Internet tools and your own rational thoughts, you take charge!

The system can be summarized as follows:

• Find stocks that are consistently hitting new highs
• Look for analysts reports that estimate increasing revenues and earnings
• Use other free Internet sites to poll investor sentiment
• Always protect yourself from the unknown by using stop losses, either actual or mental

Last Fall I wrote reviews of 2 stocks, their names are not important. I pointed out that although the stocks were having consistent price appreciation, I could not find positive analysts reports or a large investor following. I cautioned that investing in these stock was highly speculative and any purchase should be protected by the use of stop losses.

Sure enough in just a few days the stocks collapsed and I became the target of cyber attacks by some short sellers. Let me explain why.

There are several groups of short sellers who identify stocks that are having upward momentum for no reason at all. They then short those stocks, alerts their paid subscribers to short the stocks and post negative reports across the Internet investing bulletin boards until the stock collapses. They close their short positions and then brag about how smart they are.

The last step is to cyber attack anyone as a stock manipulator, who pointed out that the upward price momentum was unwarranted before they where able to put their short sell scheme into place.

I will not be silenced by the Howard Sterns and Jerry Springers of the financial world. I will continue to point out stocks enjoying price increases for unknown reasons. You should continue to protect yourself from short sellers raiding your portfolio's value by the intelligent use of stop losses.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com