# Pump and Dump



## burglar (21 January 2011)

Pump and Dump!

I read this term here sometime!
I think I understand what it means, from the context in which it is used.

What are the symptoms and signs to watch out for?


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## skc (21 January 2011)

burglar said:


> Pump and Dump!
> 
> I read this term here sometime!
> I think I understand what it means, from the context in which it is used.
> ...




Think of things you can pump: balloons, empty bags, rubber boat etc

What is common between these items?


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## prawn_86 (21 January 2011)

Sounds like a good night out to me


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## Market Depth (21 January 2011)

They can be very hard to spot at times. Enron was probably the biggest P&D of the modern day, and caught out many astute investor.


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## burglar (21 January 2011)

prawn_86 said:


> Sounds like a good night out to me




I know there is a funny side to this question .... now!


The intent was a serious attempt to find out about EXR & FAR insofar as these companies are mentioned here:

https://www.aussiestockforums.com/forums/showthread.php?t=14370&p=605998#post605998


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## burglar (21 January 2011)

skc said:


> Think of things you can pump: balloons, empty bags, rubber boat etc
> 
> What is common between these items?




Loud farty noises from large objects full of hot air! 
Illuminating ...

Guess I deserved that.
I work so damned hard at being the light entertainment here!


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## skc (21 January 2011)

burglar said:


> Loud farty noises from large objects full of hot air!
> Illuminating ...
> 
> Guess I deserved that.
> I work so damned hard at being the light entertainment here!




You are pretty much right. In order to be pumped something needs to be empty to start with...

That's why you need to research, question assumptions and provide margin of safety in your trading/investments.

Or you can just be technical and apply stop loss.

If you ever think that 'this could be my first house / retirement fund' then you are openning yourself to be had imo.



prawn_86 said:


> Sounds like a good night out to me




Does your partner know about this? Or was this how you guys met?


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## prawn_86 (21 January 2011)

skc said:


> Does your partner know about this? Or was this how you guys met?




haha not sure if i should comment on this either way


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## burglar (21 January 2011)

burglar said:


> I know there is a funny side to this question .... now!
> 
> 
> The intent was a serious attempt to find out about EXR & FAR insofar as these companies are mentioned here:
> ...




When I looked up EXR, FAR both have had speeding tickets 
Both have a stellar spike or candle with long wick or pennant thingy, whatever !!

How does a newb get two of these in his portfolio?

I had none in 40 years of trading??!!


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## So_Cynical (21 January 2011)

The Aussie stock market is dominated by prospectors and explorers (as in the number of stocks not so much by market cap) and these prospectors and explorers all pretty much share the same characteristics....they.


Have no cash flow
Don't make a profit
Don't have much money
Don't have a major resource

So they lend themselves to the possibility's of inflation by hot air....cos they are made of nothing, are empty and can often be profitable when filled with expectation and hope.


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## noirua (24 January 2011)

burglar said:


> Pump and Dump!
> 
> I read this term here sometime!
> I think I understand what it means, from the context in which it is used.
> ...




Hi burglar, I used this term in a post somewhere recently as pumping and dumping on the LSE:AIM market has been criticised as far as the USA and Canada. Many mining stocks are quoted in both domains and some in Australia and South Africa. Canada has very strict regulations on posting information but many websites in the UK virtually anything goes - one stock finished trading in Canada at 32 cents and on no news information opened at $1.46. Dumped in London it closed at 25 cents - such are the moves at times.

Many pumpers and dumpers move into a London stock on early news at 7am, often an increase in resources. Obviously they have links and email crossings and move in very fast. Trades on screen move through quickly and at times at 100s per minute.
As the UK has Market Makers (MMs) the gap between buying and selling widens and falls and the market often falls into auction when volume becomes overwhelming.

One stock LSE:REM was once involved in music and almost went bust. Changed its name to Rare Earth Minerals PLC, raised £650,000 and the market cap rose by £10 million from almost nothing. No announcement as to what is going on and there isn't a board member who knows anything about mining. Stocks like this are just gambling plays.

Once ASX:CCC gets an LSE:AIM quote the fun should start.

So basically it means lots of investors piling into a stock over one day or several and up it goes, at some point it seems as if a whistle is blown and everyone charges towards the exit. My policy is to get out well before the top and bank a few dollars, pounds I suppose.

This happens to a lesser degree on the ASX and most bulletin boards are more controlled. I could start a thread on one UK site called 'My advice on what to buy' and not an eyelid would be batted. There are lots of these. Many run threads that list their stocks being bought or sold or appear on very many threads (off-topic) ramping their favoured stock.


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## TheAbyss (24 January 2011)

Alternatively: 

Pump and Dump - An ASF forum member likes a stock, buys some, posts all sorts of exaggerated / hopeful claims regarding the companies prospects , generally talks it up for a while then sells mid stream leaving unsuspecting or relative newbies holding the baby.

Aka Musical chairs (dont get caught without a seat when the hype and rhetoric runs out of steam)

Tad harsh but some need a slap on the wrist at times.


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## noirua (6 March 2011)

The latest LSE:AIM stock in the pump and dump engine room is Sareum AIM:SAR. The stock finished up 126% on Friday and many expect a massive pump up on Monday morning in London.
This could end up the biggest pump and dump in history, so some say.
Sareum are in pre-clinical trials that have shown excellent results so far and cured cancer in 10 patients in the first trial.
http://www.sareum.co.uk
The closing price for Sareum was 2.35p - 2.40p (buy/sell spread for small trades)

NB: The above stock is in the madness zone of London's AIM market and Market Makers adjust prices to wide spreads at times and auctions are very regular, causing amazing wild swings. Currency movements can surprise at times as well. Market Makers may not offer prices whilst in Auction.

This post is not to be taken as advice in anyway whatsoever, nor is it a recommendation in any respect.


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## naughtynickers (11 March 2011)

Google

John Lebed


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## noirua (11 March 2011)

noirua said:


> The latest LSE:AIM stock in the pump and dump engine room is Sareum AIM:SAR. The stock finished up 126% on Friday and many expect a massive pump up on Monday morning in London.
> This could end up the biggest pump and dump in history, so some say.
> Sareum are in pre-clinical trials that have shown excellent results so far and cured cancer in 10 patients in the first trial.
> http://www.sareum.co.uk
> ...




Nothing much came to pass: http://uk-analyst.com/shop/page-advice/action-advertorial.show/id-130010820

Link for information only. Read risk warnings above.


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## adobee (11 March 2011)

FMJ will be either a monster potash resource or once of the best pump & dumps I have seen for some time


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## noirua (21 March 2011)

The LSE have just instigated a traders Pump and Dump charter.
In Australia stocks usually go into trading halt pending an announcement through the ASX.
In the UK now not only is there no trading halt  there is no need to put an announcement through the LSE anymore. Now the real fun starts as the pumpers and dumpers dream arrives.


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## explod (21 March 2011)

It will be noticed that I rarely post on any stocks anymore.

Because I have found profit in following pump and dump posters.

Beware, I have been trading for many years and know it is very dangerous territory.

Technical analysis is the best recommendation I could make to anyone starting off.  Best on ASF is Tech  and overall Daryle Morely, day trader, Herald Sun.   His pivot point system is excellent if you follow all the rules.


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## wayneL (21 March 2011)

explod said:


> Technical analysis is the best recommendation I could make to anyone starting off.  Best on ASF is Tech  and overall Daryle Morely, day trader, Herald Sun.   His pivot point system is excellent if you follow all the rules.




Is that an objective or subjective opinion... or perhaps fluidly subjective? :


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## explod (21 March 2011)

wayneL said:


> Is that an objective or subjective opinion... or perhaps fluidly subjective? :




Absolutely objective.  

Technical analysis is precise and very effective for the disciplined.  Anyone can learn it but there is a fair bit to learn.   But once you have it you soon recognise that it is basically following just the chart.


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## wayneL (21 March 2011)

explod said:


> Absolutely objective.



I reckon that's a subjective assessment. 


> Technical analysis is precise and very effective for the disciplined.  Anyone can learn it but there is a fair bit to learn.   But once you have it you soon recognise that it is basically following just the chart.




errrr... You're preaching to the converted there old bean , but not sure I'd categorize it at precise, even if very effective.


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## explod (21 March 2011)

wayneL said:


> I reckon that's a subjective assessment.
> 
> 
> errrr... You're preaching to the converted there old bean , but not sure I'd categorize it at precise, even if very effective.




A fixed entry criteria (which is a lot of things) and a fixed percentage trailing stop loss?

And I know you all know, just trying to give  to the newbies from someone ancient and frail.

Maybe I need to learn about the meaning of objectivity.


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## wayneL (21 March 2011)

explod said:


> A fixed entry criteria (which is a lot of things) and a fixed percentage trailing stop loss?




All subjectively decided.

The point I'm trying to get to plod is that it is dangerous to label someone as the best without knowing every detail AND without knowing about those who are a bit quieter for comparison.

Tech's contribution contribution is certainly valuable but I'm sure even tech himself would shy away from "the best" tag.


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## explod (21 March 2011)

T/a is only part of my overall strategies now, but is one of the important components of learning to trade. (the most important initial one IMHO).  I was addressing the question of pump and dump initially and then to discuss safe and unsafe ground.

Sorry to have interupted at all.


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## explod (22 March 2011)

wayneL said:


> All subjectively decided.
> 
> The point I'm trying to get to plod is that it is dangerous to label someone as the best without knowing every detail AND without knowing about those who are a bit quieter for comparison.
> 
> Tech's contribution contribution is certainly valuable but I'm sure even tech himself would shy away from "the best" tag.




Know a lad who works for an independant trading company in Holland and they computer trade, sometimes in an out in seconds, all to very fixed and set criteria.

From a book by Michael Covel "Trend Following" I worked out a fixed systen which would identify stocks who had moved sideway for about 6 months and on an uptick of 10% would enter the trade with a fixed stop loss of 5%.     I made 60% for the financial year of that system.   About 6 trades in 10 failed but the winners made the money.

I believe that learners should as part of the process to trade by very fixed rules/criteria system in the beginning.

Could not rest without tailing my thoughts off on this Waynel.  cheers mon ami


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## wayneL (22 March 2011)

explod said:


> Know a lad who works for an independant trading company in Holland and they computer trade, sometimes in an out in seconds, all to very fixed and set criteria.
> 
> From a book by Michael Covel "Trend Following" I worked out a fixed systen which would identify stocks who had moved sideway for about 6 months and on an uptick of 10% would enter the trade with a fixed stop loss of 5%.     I made 60% for the financial year of that system.   About 6 trades in 10 failed but the winners made the money.
> 
> ...




Cheers, and a fine and robust system that most likely is. But fixed and set criteria can be set quantitatively/statistically as well... even fundamentally.

Personally, I'm holus bolus on technical analysis like you, but it is not the only way.


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## noirua (26 March 2011)

explod said:


> It will be noticed that I rarely post on any stocks anymore.
> 
> Because I have found profit in following pump and dump posters.
> 
> ...




I tend to invest in Australian stocks and am a Trader in UK AIM market stocks. As time has gone on I'm getting better at it. I use T20 trades very often and attempt to close out within 18 trading days. If I do it right the broker sends me money after the T20 completes and this way no money leaves my account.

As a trader I look out for announcements and try to work out if it is favorable and at a certain moment, I've worked out with experience, I move in and buy at the early stages of a pump up. Profits have got a lot better as I time the dump better. [Aussie markets keep having 'trading halts' and for a pumper and dumper that makes it a real no no]

Women are far better traders than men and fortunately there aren't that many interested. Men have a macho problem that stops them quickly admitting a mistake - I made two heavy losses due to my macho trading problem but have overcome it now, errrr maybe.
Men tend to follow their team more so than women. The idea they should chop and change teams a lot is very difficult for a man. A woman tends to change her mind, they're allowed to, so selling losing stocks comes easily.

I could continue on for pages but I'll stop now - good fortune my friends.


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## burglar (21 March 2012)

noirua said:


> ...  - good fortune my friends.




Hi noirua! Is that a tautology?!


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## burglar (26 October 2012)

Help needed!

If a company has been pumped and dumped, 
how do you know if it's current price is above or below intrinsic value?

I think I'm asking for a simple formula?!


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## craft (26 October 2012)

burglar said:


> Help needed!
> 
> If a company has been pumped and dumped,
> how do you know if it's current price is above or below intrinsic value?
> ...




There is NO simple formula – the very existence of stock markets is evidence of that.


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## greggles (18 July 2018)

Interesting article I found on trading Pump and Dump stocks. Worthwhile reading if the topic interests you.

https://tradinglab.tech/en/trader/trading-strategy-pump-and-dump.html


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## frugal.rock (17 September 2020)

Nice reading there Greggles.
Cheers.


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## KevinBB (11 October 2021)

In this Australian Financial Review article earlier today, ASIC is quoted as saying in a Telegram post:
_“We can see all trades and have access to trader identities. We’re monitoring this platform and we may be investigating you. You run the risk of a criminal record, including fines of more than $1M and prison time by being involved.”
_
The article goes on to say that the posting has been confirmed by ASIC. Hopefully this will be the start of a reduction in much of this pump and dump madnesss, at least in Australia, letting stocks in the the small cap area of the market return to some kind of normality.

KH


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## Sean K (11 October 2021)

KevinBB said:


> In this Australian Financial Review article earlier today, ASIC is quoted as saying in a Telegram post:
> _“We can see all trades and have access to trader identities. We’re monitoring this platform and we may be investigating you. You run the risk of a criminal record, including fines of more than $1M and prison time by being involved.”_
> 
> The article goes on to say that the posting has been confirmed by ASIC. Hopefully this will be the start of a reduction in much of this pump and dump madnesss, at least in Australia, letting stocks in the the small cap area of the market return to some kind of normality.
> ...



Kev, Telegram is the messenger app? Sounds interesting. Can you cut and paste the text in from the Fin as it's paywalled. Or a screen shot? Tks, kennas


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## KevinBB (11 October 2021)

Yes. The app. I am hoping ASIC is finally getting serious about what they do.

KH


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## Dona Ferentes (11 October 2021)

kennas said:


> Kev, Telegram is the messenger app? Sounds interesting. Can you cut and paste the text in from the Fin as it's paywalled. Or a screen shot? Tks, kennas



the text is as stated by @KevinBB . Short and sharp

The ASIC post was on Monday at 9.32am on a newly formed chat group called “Pump and Dump Organization”, an account named ASIC posted that “coordinated pumping of shares can be illegal”.



> The post was not taken seriously. One user said the post was sent by someone “from another telegram group trying to spook people here. ASIC don’t send messages like this”. Another said it was, “fake ASIC”.




But an ASIC spokesman confirmed the post was genuine.....

Undeterred, the group pressed on. At 9.54am, the group was told the stock the group going to pump was YPB, which has a market capitalisation of $14 million.

“USE THE MARKET ORDER AND SEND IT TO THE SKY!!” the moderator post said just before markets opened for trading.

The ASIC post was later removed from the feed. The regulator confirmed it did not remove the post or ask for it to be removed.

............ The ASX Pump Organization group had 299 members of which 59 were online as of 11.40 AEST. However, posting activity ground to a halt. The pinned message read “Time to wipe 0.005 on YPB. ”


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## explod (12 October 2021)

explod said:


> Know a lad who works for an independant trading company in Holland and they computer trade, sometimes in an out in seconds, all to very fixed and set criteria.
> 
> From a book by Michael Covel "Trend Following" I worked out a fixed systen which would identify stocks who had moved sideway for about 6 months and on an uptick of 10% would enter the trade with a fixed stop loss of 5%.     I made 60% for the financial year of that system.   About 6 trades in 10 failed but the winners made the money.
> 
> ...



Interesting that you both ticked this after all the years.

The lad married a Swedish lass, he and another set up their own trading business in Sydney and became millionaire's.  He moved back to Mt Martha where he and his wife have two lovely children and they are in heaven.  Still interact with them now, his father deceased and I used to love a whisky together


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## KevinBB (12 October 2021)

explod said:


> From a book by Michael Covel "Trend Following" I worked out a fixed systen which would identify stocks who had moved sideway for about 6 months and on an uptick of 10% would enter the trade with a fixed stop loss of 5%. I made 60% for the financial year of that system. About 6 trades in 10 failed but the winners made the money.



Interesting. I'm part way through the book. Not yet at the stage where Michael, and the other writers, talk about systems.
KH


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## KevinBB (20 October 2021)

ASIC are at it again, warning users in an online forum (not ASF) channel that they are watching their pump and dump efforts. Still wondering if they will follow through with all this talk.

Link to article from AFR online version

KH


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## basilio (20 October 2021)

KevinBB said:


> ASIC are at it again, warning users in an online forum (not ASF) channel that they are watching their pump and dump efforts. Still wondering if they will follow through with all this talk.
> 
> Link to article from AFR online version
> 
> KH




About bloody time. There is nothing subtle about pump and dump schemes, They are simply criminal market manipulations .  Absolutely no different to rigging a horse race, defrauding the tax office, or dropping millions in  Government  grants  to friendly companies or electorates your trying to impress...

Interesting situation though where ASIC is in fact tipping people off that they are watching. Have they ever had enough evidence to convict peoplein chat rooms for being part of pump and dump scheme?  Who is liable ? The promotors sure.  But  are people who get in and out with a buck but didn't actually start the deal also in the frame  ?


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