Ramping - where do we draw the line?

[Joe Blow]

Okay, I think we can all agree that ramping, particularly the drive-by variety, is one of the great scourges of stock market forums.

But what exactly is ramping and what constitutes ramping?

What information does a poster need to include in a post so that it qualifies as something other than a ramp?

My view has always been that as long as someone has some reason to back up their claim that a stock will go up, or down in the case of downramping, that is enough to exclude it as a ramp. I've always seen a blatant ramp as being a post in which someone claims, without anything to back it up, that a stock will rise or fall in price very soon and that we should get in or out immediately. Is there enough vigorous debate happening on the forums that any erroneous or over optimistic claims will be challenged and/or exposed by other members? Should we take an extremely hard line or should we take a more flexible approach?

I have decided I need to re-evaluate the way I deal with the ramping issue and I would like to hear your views. I want to know how much ramping annoys you and how tough you think we should be on ramps or borderline ramps here at Aussie Stock Forums.

Also, I'd like to hear you views on the unjustified bumping of threads in an attempt to draw attention to a particular stock. Where do you think we should draw the line and say that a bump was unjustified? At the moment my policy is to delete posts with no content that are used to bump threads. I tend to let posts go that add some new information - even recycled if relevant - as a basis for bumping the thread.

Please tell me how you feel about ramping and how it should be dealt with here at Aussie Stock Forums. I think we can all agree it's something we can do without, but where do we draw the line?

 

[doctorj]

I agree with you, if you can substantiate an opinion with information that is in the public domain and it can be readily verified then it shouldn't be considered a ramp.

eg. 'I hear from an insider that XYZ has 3 new contracts due to be finalised within the next month' is a ramp unless XYZ has made an announcement to that effect.

I also believe that bumping a thread on a stock could be considered a ramp.

ASF's posters have for the most part participated in good faith, hopefully by maintaining a core of good contributors the number rampers you get on other forums will stay away even as ASF grows.

 

[Smurf1976]

I think ASF is going quite well as it is so don't mess it up...

Re the bumping issue, it depends on the situation. If someone just says "Take a look at XYZ, i'm no expert at this but it caught my attention looking at the chart. What do others think?" then I wouldn't call that a ramp even though there's no specific information given. It seems quite reasonable to me that someone just want's to start a thread on that stock without stating whether they think it's going up, down or whatever (and let's face it nobody really knows for sure).

On the otherhand "buy ZYX it's going to double" is a pretty blatant ramp as is a simple "XYZ" to bump the thread.

If someone wants to argue the point at length then I think that ultimately is what forums like ASF are for. "I know XYZ only has x million tonnes of ore in the ground but that's going to be worth quite a lot because (followed by lengthy explanation of market fundamentals)" seems quite reasonable.

Experts are another point. Some people just don't need reference material on certain topics. They are few and far between but they do exist. Many people are like that with football or cricket, they just know who won the Grand Final in whatever year or who plays for which team. Others have specific market or financial knowledge. Some of the most knowledgeable people can't quote where some info came from because they themselves are an expert source. They just don't need to be told in an announcement since they know so much about the underlying operation that of course that's what the company is going to do - it's just so obvious to them. Such people should be strongly encouraged on ASF but of course they are not in a position to verify everything they say becasue "that's just how it is" as far as they are concerned. It really is like night follows day to them. It's not normally difficult to sort the genuine experts from the rampers since the latter are very light on facts.

I think the main thing is to try an keep ASF fairly intellectual and avoid the %$#@ that dominates some other forums. And of course there's always room for a bit of discretion.

 

[dutchie]

G'day Joe

I don't think there is much ramping on this site yet that you should be too concerned.

I agree with Smurf that you should not always have to substantiate your post if it is given in the spirit of bringing a subject (stock) to the forums attention.

I am no expert in any part of trading but I sometimes see something that may interest others as well (even though I don't have anything constructive to say). I can then request other more knowledgeable people on this forum to comment on the subject.

If you become too restrictive then I think it will inhibit newbies to make posts.

I am against blatant ramping but I think that at this stage you are in a position to use your wise discretion to get rid of anything that looks suspect.

Maybe as the numbers grow this will become more of a problem but at this stage it seems under control.

Some members become very enthusiastic in their favourite stock and sometimes it could be perceived as ramping but again I think it could be handled internally with a private message warning if you think they are crossing the line.

 

[krisbarry]

Ramping, what ramping...?

Go LVL (LV LIVING LIMITED) , new Announcement sounds great, get in b4 may!

 

[ghotib]

Hmmmm... Joe, I have a related question: What's the preferred way for forum members to respond to ramping? I've just posted a msg to a ramp thread, but I'm wondering if it's better to treat them like trolls and ignore them? Do you have an opinion? Do other people.

 

[Stan 101]

Hi Joe, I'm only new here and have noticed there is the odd bit of fluff (others may think what I write is also).
For a RAMP to be effective, it has to reach a certain population who are in a position to make a substantial buy or sell. Without being rude, what is the hit rate of the site? Would the population of the site be able to RAMP a stock?
To my way of thinking, if you are prepared to take the word of someone on a site such as this (or any site) that you have never met, and are prepared to put your hard earned against their comments, it's fraut with danger / stupidity.
If I were you, I'd just play each post as I see it based on hit rate...


cheers,

 

[Joe Blow]

Hmmmm... Joe, I have a related question: What's the preferred way for forum members to respond to ramping? I've just posted a msg to a ramp thread, but I'm wondering if it's better to treat them like trolls and ignore them? Do you have an opinion? Do other people.

The best way to deal with someone who you believe is ramping or representing a stock dishonestly is to challenge their claims.

Rampers can often get angry when people question their claims, usually because they are so emotionally involved, or overcommitted financially in the stock. It's a good way to discover their real motivation and at the same time shine a light on the stock in question to see whether their rosy story holds up under scrutiny.

 

[Joe Blow]

Hi Joe, I'm only new here and have noticed there is the odd bit of fluff (others may think what I write is also).
For a RAMP to be effective, it has to reach a certain population who are in a position to make a substantial buy or sell. Without being rude, what is the hit rate of the site? Would the population of the site be able to RAMP a stock?
To my way of thinking, if you are prepared to take the word of someone on a site such as this (or any site) that you have never met, and are prepared to put your hard earned against their comments, it's fraut with danger / stupidity.
If I were you, I'd just play each post as I see it based on hit rate...


cheers,

Hi Stan 101, welcome to the forums!

Many rampers go from forum to forum posting the same information in order to attempt to influence the largest possible group of traders. This forum has close to 1000 members and is growing quickly so we're definitely up there in the top few Australian stock market forums.

However, I think we have the best posters of any of the stock market forums... but I'm biased.

Like I said to ghotib, if you think someone is ramping a stock, challenge their claims. Ask questions. Don't make it easy for them. I'm going to just start deleting posts that are blatant ramps to try and and deter people from doing it.

But overall I think you are largely correct when you say it's a case of buyer beware. Rampers are like dodgy used car salesmen. If someone is trying on the hard sell tactics, there's usuallly a very good reason for it.

 

[RichKid]

The best way to deal with someone who you believe is ramping or representing a stock dishonestly is to challenge their claims.

Rampers can often get angry when people question their claims, usually because they are so emotionally involved, or overcommitted financially in the stock. It's a good way to discover their real motivation and at the same time shine a light on the stock in question to see whether their rosy story holds up under scrutiny.

That's excellent advice Joe, a good yardstick to use. I often get annoyed when people say
'my broker reckons it's going to be $XXX dollars' or 'you'll be sorry if you don't buy this stock' or aggressive replies to those who disagree critically.

There is also the option of reporting serious ramps and 'blackbox' spruikers to Joe ASAP to reduce the fallout by clicking on the icon at the top right of each post- but be careful not to overuse it or it undermines its effectiveness.

There was also a point made about the effect of a forum on the actual price of a security- it's unlikely as you say that it'll actually lead to some 'manipulation' of the market price. In fact that is the essence of it, people think that if they just post the same positive fluff over and over again that it'll help them make more money on the stock- it's not that easy to control the market imo (but it will draw in unwary victims).

What it does do is reduce the quality of posts, distract good posters & potential good posters (including real experts) and the administrators. It also encourages others to ramp as well.

It's also a bit silly to rehash or rejig old co anncts in a positive light without stating the source- hence the challenge is always good but some people wont bother and will just look for better posters (or forums). Human nature being what it is if we see the same fluff several times in a thread (especially if it's bumped to the top of the forum everyday) we are likely to believe some of it and I think it's our responsibility to be vigilant so we can maintain the standard by getting posters to be more responsible.

Always look for people who suggest that a stock must go up or is certain to go up- there's no such thing as a sure thing and you don't even know if the poster still holds the stock or is looking for quick rise to exit it.

Anyway, just my thoughts, not everyone will find these forums to their liking- hopefully it'll be the rampers that stay away. Quality over quantity is always best.

Any constructive criticism of my views is welcome as it'll help us all...

 

[canny]

I never mind someone making suggestions - particularly with a good back up reasoning.
It's often a chance to look at something that may have otherwise slipped under my radar - especially as I don't read every post on every forum. No-one has that much time, or they'd be well advised to 'get a life'!
Ultimately though, ramping blatantly is very distasteful, but we are all adults and should be able to see through it and do our own research.

 

[Investor]

The best way to deal with someone who you believe is ramping or representing a stock dishonestly is to challenge their claims.

Rampers can often get angry when people question their claims, usually because they are so emotionally involved, or overcommitted financially in the stock. It's a good way to discover their real motivation and at the same time shine a light on the stock in question to see whether their rosy story holds up under scrutiny.

G'day Joe,

This is a logical approach that you advocate. Sounds fair and reasonable.

 

[Aussiejeff]

Hey guys, what about "Professional Advice" offered by the mass media too?

I saw an article in a major newspaper the other day where some stockmarket "expert" was recommending something along the lines that "in the current market climate, most stockholders should sell their small cap shares and invest in big blue chip stocks such as BHP".

Shouldn't he have just said "invest in big blue chip stocks"? rather than specifying one stock?

The only conclusion I could drew from his comment where ONLY BHP was mentioned was that it was a subtle 'ramp'. He wouldn't have a substantial holding in that dog would he? ;o)

Anyway, your thoughts appreciated on whether you suspect some media "stockmarket experts" would actually try to influence shareholders to support stocks they own???

Happy trading,

AJ

 

[dutchie]

Where money is involved - anything and everything is possible (and probable).

 

[krisbarry]

I agree with Aussiejeff, those share mags etc are full of nothing but ramps for stocks. Eg. "TOP 20 stock for 2005". Top50 Stocks for "Do you own super" etc. They list the stock names, codes and show charts. So I am sorry but which ever way you look at it is nothing but media ramping.

My question is why do we got shot down in flames on boards such as this if we are doing nothing more than what the media is doing.

I have posted charts, said things like a must buy, given accurate details of annoucements etc and I get called a ramper!

Hmm!

 

[Aussiejeff]

Hiya Krisbarry.

I agree 99% with your sentiment. The other 1% I'm not sure about!! ;o)

Mebbe you have to be a "Media Pro Ramper" to get away with blatant 'ramping' without getting flamed....

Really folks, it all comes down to BUYER BEWARE!!! Sheesh. If Chicken says "I reckon ZFX is a dead cert up 20%" I don't take that as meaning I should jump onto Comsick immediately and buy 1,000,000 ZFX BLIND then scream FOWL when the price plummets 20c in the following days (well, if I did do something that stoopid it's TUFF LUCK on my behalf - it isn't because a perceived 'ramp' is the problem. No sirree. GREED is the prime mover and ANYONE can be accused of giving the wrong lead on a share if it turns bad for a buyee!!

If someone honestly believes their pet share is gonna blow sky high, well let 'em brag/ramp I say. Freedom of speech and all that. If it turns turkey those with a more circumspect eye can have a bit of a giggle as the online handwringing picks up pace! ;o) . Really, if you haven't entered share trading with a reasonable procedure to follow (ie doing your OWN company research, entry/exit plans etc) and are just trading on so-called ramping hype, you deserve little sympathy anyway.

That's my 2.17c worth......

Happy trading,

AJ

 

[RichKid]

Most people here don't have as much trouble spotting a ramp- it's just the ones who may not know that we have to worry about. Also doesn't help ASF maintain a high standard. Just because some sectors of the media are bottom dwellers it doesn't mean poor quality posts or misleading material should be tolerated here. No doubt some in the media have been sued for breaking the law. Fortunately we haven't had that happen here but ASIC are keeping an eye on things.

Some media articles may be too positive or have too many tips but at least they aren't all blatantly misleading as some ramps have been. People buy Shares mag for example because they actually get something positive out of it, it's not all about tips. If it was that bad it would be out of business. You learn about the industries and there is a lot of educational material too. It's good to be constructive and critical, hence the fight with rampers.

By all means air your views but if it doesn't fit Joe's ethic and the ASF spirit feel free to leave for hotcopper or elsewhere, plenty of free speech there.

Besides, there isn't a general right to free speech in Australia except in limited circumstances from what I've heard. I very much doubt that ramping qualifies, important as it may appear to some.

 

[Smurf1976]

Always insisting on firm proof of anything posted is the surest way to kill a forum IMO. Who can honestly say that they have a link which forms the basis of all thier opinions. If you do then you are simply quoting others and not thinking for yourself.

Demanding proof of what is reasonably common knowledge is a tactic commonly used to silence someone you don't agree with. Seen it done on other forums quite a bit.

It can get quite silly. Often along the lines of "Just because that's always happened before doesn't mean it will continue. You can't use what happened last time as the basis for what will happen this time. What happened overseas is irrelevant etc..."

Now, there is no real answer to such questioning but commonsense says that if it happened under these circumstances before and nothing else has changed then most likely it will happen again. This sort of thing just goes on and eventually those who know what they are on about just get sick of it and give up.

Imagine if someone asked Tech/A or some other knowledgeable posters to "prove it". Anyone who actually knows what they are on about, who isn't relying on what others are saying, won't be able to quote a source. They ARE the source. Experts are rare but very valuable - we don't want to scare them away by demanding "proof".

That said, we don't want too many threads like the ZFX one...

 

[doctorj]

It's not so much a case of having to substantiate every point with irrefutable evidence, but atleast having something to support your opinion.

The difference might be, "You should buy XYZ now at $1 because they will go to $2 soon" compared to "You should buy XYZ now at $1 because there new project is worth 100cps which should see them at $2 soon enough".

There's plenty of room for rumours and conspiracy theories, but I think it's good that as many points are supported with evidence/calculations etc as possible. It's not about people challenging other's opinions with screams for proof, but for each of us to add as much value to this forum as possible by fully explaining our viewpoints.

 

[Mofra]

My two cents:

If someone has posted something that sounds suss, as Joe said someone should challenge it. If they can't provide a reason or a source for the info (if not an ann or article, at least a rough calculation of an expected price target or profit) rampers generally get aggressive - in that case they violate the rules of the room anyway as I understand them.

Given this forum tends to be a little more high brow than some other sites going (especially the automatic scrolling type forums) I doubt the problem will ever get as bad here as in other sites.