MMS - McMillan Shakespeare

[skyQuake]

Naked short selling is sadly everywhere on big news day or what appeared a short (prima facie). ASIC simply does not police it properly.

I suppose you have a detailed knowledge of ASIC workings. And big guys don't really care about things such as enforcable undertakings and potential jail time.
Naked shorting isnt just banned sake of it. Do you know what happens T+3? Settlement fails, broker's backoffice panics and a forced buy-in probably occurs.
Then the SMH publishes an article and the pollies hop onto the bandwagon and someone goes to jail.

Oh and if someone can manipulate/move it from $15.36 to $7.00 on a few hundred thousand shares only at the open today.....who ever that was may find that a few fundies and shareholders + the shortcovering + naked shortcovering the market can move it right back at the open tomorrow and coming days get this back to its highs

It was 1.2m shares on the open. Not a few hundred k.

Plus, if I was a cunning short seller I would want good prices. So instead of dumping at the open, I would wait till after the open before selling bits and pieces with care not to smash prices.

This is exactly what happened on the 16th. Though it was mostly long selling (a paltry 45k got short sold)

Recall Volumes dry up on day 2 and in an illiquid the big stock covering had to be done today and I reckon 3-4m shares were not.... leaving a massive gap (4m is about 4 days full regular trading and to cover would that would take about 8-12 days of regular buying) and your right NAB wont lend all theirs. No shareholder will lend.

Less reason to short sell then if they can't bank their potential paper profits. Why get into a trade they can't get out of?

This therefore could bounce very hard. Stocks that halve in a day can double in day. Especially when the market got this plain wrong as they refused to read the important bits i,e...Coalition support and Coalition miles ahead in betting/polls and bookies have got every election correct for near 20 years. The earnings were excellent and the dividend was not cancelled and that is a falsehood. If anything it is only delayed.

Find me a stock that halved, then doubled, the nxt day. Or even the next week. Shares trading at 0.1c min tick don't count.

Again, theres been a lot of opinion and no facts.

My take on this is that today's selloff was fear + uncertainity. Market hates nothing more than that! Management explicitly saying they're keeping their mouth shut doesnt look good. Makes it look like they have something to hide, even if they dont.
No-one wants a stock swimming in such muddy waters, so the exaggerated gap down at open.

 

[FxTrader]

Be careful relying on RM marketing propaganda - It’s always hindsight and he's always infallible. If you had the debate I had with him a few years ago on his blog about MMS this article would have you laughing your **** off.

RM came out with his commentary after the market closed. I agree with his analysis on this since it aligns with my own, that is quite different from relying on it. I still think think it's a bit rich for a smug day trader who banks a quick profit to pass off buy and holders as mugs. I could have banked a quick profit as well but judged this to be the wrong strategy. Time will tell who made the better decision on the day.

Montgomery has been wrong about MMS, CCP and a few others in the past. On balance though I tend to agree with his focus on value investing but he is definitely fallible.

 

[ROE]

Craft decent logical investor mind but I think we may have import some hotcopper poster in here where nothing but blue sky when the facts changed

- - - Updated - - -

RM came out with his commentary after the market closed. I agree with his analysis on this since it aligns with my own, that is quite different from relying on it. I still think think it's a bit rich for a smug day trader who banks a quick profit to pass off buy and holders as mugs. I could have banked a quick profit as well but judged this to be the wrong strategy. Time will tell who made the better decision on the day.

Montgomery has been wrong about MMS, CCP and a few others in the past. On balance though I tend to agree with his focus on value investing but he is definitely fallible.

I don't trust a guy that has something to sell and promote conflict of interest...

Rudi from FNarena I found over the years is very very good, very frank not much hidden agenda.

 

[skyQuake]

Craft, 2 providers I know of have 'pre-borrow' in place to facilitate easier trading.

Eg. Interactive Brokers and IG markets had borrow today:

http://www.igmarkets.com.au/cfd/cd-shares.html
https://www.interactivebrokers.com/...a&tag=Australia&ib_entity=llc&ln=

 

[skc]

I still think think it's a bit rich for a smug day trader who banks a quick profit to pass off buy and holders as mugs.

Who's done that?

 

[FxTrader]

I don't trust a guy that has something to sell and promote conflict of interest....

Well that means you don't trust about 99.99% of the advisors and commentators in the market who are all selling or promoting something. I prefer to make my own judgements, RM's commentary is interesting but track record is everything. There is no altruism in the finance and investment world, everyone is in the game to make money using some angle. Bias is everywhere, you just need to identify and filter it.

 

[ROE]

Well that means you don't trust about 99.99% of the advisors and commentators in the market who are all selling or promoting something. I prefer to make my own judgements, RM's commentary is interesting but track record is everything. There is no altruism in the finance and investment world, everyone is in the game to make money using some angle. Bias is everywhere, you just need to identify and filter it.

Commentators and newspaper are fine... I don't trust people in fund management who trades stock at the same time as telling the public this is what I did in hind insight and this stock worth this much...

You can buy at X pump said this stock worth Y and offload, then **** happen ooops we sold at Y sometimes ago -

And yes I don't trust most people in finance where I identified there is a conflict of interest....

 

[GuruofGurus]

Naked short selling is sadly everywhere on big news day or what appeared a short (prima facie). ASIC simply does not police it properly.

Oh and if someone can manipulate/move it from $15.36 to $7.00 on a few hundred thousand shares only at the open today.....who ever that was may find that a few fundies and shareholders + the shortcovering + naked shortcovering the market can move it right back at the open tomorrow and coming days get this back to its highs

Recall Volumes dry up on day 2 and in an illiquid the big stock covering had to be done today and I reckon 3-4m shares were not.... leaving a massive gap (4m is about 4 days full regular trading and to cover would that would take about 8-12 days of regular buying) and your right NAB wont lend all theirs. No shareholder will lend.

This therefore could bounce very hard. Stocks that halve in a day can double in day. Especially when the market got this plain wrong as they refused to read the important bits i,e...Coalition support and Coalition miles ahead in betting/polls and bookies have got every election correct for near 20 years. The earnings were excellent and the dividend was not cancelled and that is a falsehood. If anything it is only delayed.

and MMS is illiquid in both directions .....not just one. Being caught short in this earnings machine with coalition supporting it fully is very dangerous. Alot of people now on the wrong side of this. Recall It had already fallen from $18.64 to $15.36 so a lot was already factored in last Tuesday fall. It is way overdone now.

if it had opened at 12 and steadily sold all day different story. But it gapped down hard in secoonds and with only 0.5m shares and now MMS can gap up just as hard.

The formula for a massive pop is now in play. We shall see If I am right....did you see the very strong buying all day anyone right up to the close....look at the chart.

I think it will settle in the $12-15 range and creep up to $20 as the election result solidifies and rudd goes back to the hole in which he came out of.

Just my read based on facts. DYOR

Skyquake...like your work....I expect a gap up and the naked shorts and shorts that cant find sufficient stock in an illiquid stock without the ability to borrow them to be in a world of pain. By my reckoning, the lion share of the 4m shares short (naked or other wise) were shorted at the open, $7.50 and $8.00 so with the stock going over $9 and perhaps even well over $10 again the short covering will begin in earnest. Yesterday the volume was there but today it will be less and only the first hour on a friday and therein lies the danger if you need to buy it back. This stock can also form big spread gaps (prices between bid and offer) and so the price paid to buy it back rises fast.

This was the wrong stock to short (Coalition protected, lease orders and dividend just delayed (not cancelled), just Bowen/Rudd off the cuff comments and no new FBT policy even formed yet, no legislation enacted or even formed, +15% increase in FY13 earnings, 3-4m shares short, fundies still willing to buy in, thinly traded.

I expect the buying to continue strong today but at a more frantic pace ....as there will be far less stock available to purchase. Selling was completed yesterday morning.....and now there could be buying demand for as many 8m shares (3-4m short plus fundie average downs, new buyers, hedge arb buyers lets say another 3-4m conservatively...that is 8 days of buying required within T+3 and at that rate MMS may be back to where it was before the trading halt if not higher if the odds improve of a coalition Victory.

Just my read.

 

[GuruofGurus]

Skyquake...like your work....I expect a gap up and the naked shorts and shorts that cant find sufficient stock in an illiquid stock without the ability to borrow them to be in a world of pain. By my reckoning, the lion share of the 4m shares short (naked or other wise) were shorted at the open, $7.50 and $8.00 so with the stock going over $9 and perhaps even well over $10 again the short covering will begin in earnest. Yesterday the volume was there but today it will be less and only the first hour on a friday and therein lies the danger if you need to buy it back. This stock can also form big spread gaps (prices between bid and offer) and so the price paid to buy it back rises fast.

This was the wrong stock to short (Coalition protected, lease orders and dividend just delayed (not cancelled), just Bowen/Rudd off the cuff comments and no new FBT policy even formed yet, no legislation enacted or even formed, +15% increase in FY13 earnings, 3-4m shares short, fundies still willing to buy in, thinly traded.

I expect the buying to continue strong today but at a more frantic pace ....as there will be far less stock available to purchase. Selling was completed yesterday morning.....and now there could be buying demand for as many 8m shares (3-4m short plus fundie average downs, new buyers, hedge arb buyers lets say another 3-4m conservatively...that is 8 days of buying required within T+3 and at that rate MMS may be back to where it was before the trading halt if not higher if the odds improve of a coalition Victory.

Just my read.

oops where is the selling..... 3 x the buying right now and I wont be suprised to see that ratio become 4-5x by the open.

I expect natural Volume will no more than be half of yesterday so maybe 6m shares get transacted today so the shorts mathematically cannot get close to acquiring their yesterday aggressive short sold shares back before the weekend and they need to. Would not want to be short this over a weekend. No borrowing around either.

Let the mad scramble for shares begin. A few fundies may push it along with their average downs....making shorts scramble harder.

Just my read.

 

[GuruofGurus]

oops where is the selling..... 3 x the buying right now and I wont be suprised to see that ratio become 4-5x by the open.

I expect natural Volume will no more than be half of yesterday so maybe 6m shares get transacted today so the shorts mathematically cannot get close to acquiring their yesterday aggressive short sold shares back before the weekend and they need to. Would not want to be short this over a weekend. No borrowing around either.

Let the mad scramble for shares begin. A few fundies may push it along with their average downs....making shorts scramble harder.

Just my read.

Only 175,000 shares to buy on screen and only 90,000 shares to $10.50....even if there is double that off screen there is simply no available stock to buy back and 6-8m shares in demand approx.

That is what a "short squeeze from hell" is called. This could rise substantially today. Sit tight. If 1-2 hedge funds go long or existing fundies top up in the squeeze.... share demand could skyrocket. Price will gap up.

This was was a bad short and for some it is going horribly wrong.

 

[FxTrader]

Hmm, MMS opens up 8%. Perhaps the day traders should have left something on the table after all.

 

[Trembling Hand]

Hmm, MMS opens up 8%. Perhaps the day traders should have left something on the table after all.

Why? Thats not their play?

 

[FxTrader]

Why? Thats not their play?

It was the wrong play.

 

[Trembling Hand]

It was the wrong play.

Err ever hear of trade your plan?

 

[FxTrader]

Err ever hear of trade your plan?

Sure, and exiting yesterday was the wrong plan for MMS, now up 10%.

 

[Trembling Hand]

Sure, and it was the wrong plan for MMS, now up 10%.

Oh my god. So every time you see an occurrence of a "i should of" you change you strategy....... Brilliant approach!!

 

[FxTrader]

Oh my god. So every time you see an occurrence of a "i should of" you change you strategy....... Brilliant approach!!

Not what I am saying at all. Take your frustation out on someone else.

 

[craft]

It appears that the auto industry has put together a 10 Million advertising fund for the election campaign (ouch). Coupled with the ABS new car sales figures due 19 Aug and 17 Sept which will undoubtedly show officially the biggest drop in car sales EVER. State governments(including Labor) are opposed. Charities, Health dept etc are screaming out about a blow out in wages which will be caused by the move etc etc. Business groups are opposed. It seems Rudd has more to worry about then just Federal opposition on this. I suspect if the low information voters get swayed from their rort opinion Rudd will backflip in a flash.

While the Rudd Government has claimed it will not make any changes to the sudden overhaul of the tax rules on company cars - announced on July 16 and which has already cost 300 jobs and threatens a further 3000 - it has been privately canvassing ideas with the car industry.

The only proposal I have seen so far is a $3000 FBT rebate to public servants for Aus built cars. Peter Costello has already been all over that in relation to the equity of it only being available to public servants.

When will Rudd learn that non-consultative knee jerk populist politics screws up business confidence and ultimately backfires?

I suspect, had the industry been consulted we would have got a 1% lift to the 20% statutory rate each year – people would have phased out of novtated leases or swapped to operating method at varying rates depending on their circumstance over the next 5 odd years and everybody would have had time to adjust to the ending of a 28 year old policy.

 

[craft]

An example of the auto industry propaganda.

http://www.youtube.com/watch?v=iN7NYZg6oUU&feature=player_embedded

Hmmm, likely effective for their audience though.

I wonder how an advertising campaign will play out during the election. Deal anybody?

 

[notting]

There is no way Rudd is going to win the election.
This is a good bet on MMS!