Some more thoughts.....

[fastwalker]

OK, this is not a pump, nor a bash, it is merely an attempt to look at the effects of the Green Baron interview of UC, had on us as stockholders. I trust it will not be perceived as anything other than a commentary …such as in “For What it’s Worth.” First I wanted to address the “mixed” responses over the interview and then my take on the significance of what was said and wasn’t said in the interview. Now don’t look for any earth shattering theories here, just some common sense extrapolations…lol

The Green Baron interview yesterday and if you've just read it, today, did very little in the estimation of many around the boards, to dispel rumors, quash the MM problem or at least address it, and or raise hopes of a "new beginnings" for CMKX, as in a possible upward PPS movement.

Fortunately, those on our board were for the most part not expecting too much. I applaud their sense of stability and share in their sense of disappointment and befuddlement over the interview. This lack of response posted though, didn’t really, in my opinion, portray what I believe was the range of mixed emotions that some must have surely experienced. And by no stretch of the imagination, would I even suggest that there wasn't a high degree of disappointment felt by all here and across the boards in general.

While I ‘m not denigrating the intellect and or emotional level of our members, I do see the interview as similar in the self-promoting way, we as children would manipulate our emotions and rationalize our response, when we really wanted something and thought we couldn’t live without it, only to discover later, that we weren’t getting it after all. I kind of think it’s not unlike wanting something to be true, in which we have built up and waited with bated breath, as we watched the days, hours, minutes and seconds painfully ticked away until the “magic” moment arrived….sort of like the long waiting and subsequent disappointment, sometimes experienced as a child on Christmas day, when the much-anticipated gift from Santa Clause was not found.

One of the things I’ve found interesting and or noteworthy is the seeming reluctance, indeed, the outright hostility in some cases, of the shareholders to view the “CMKX EXPERIENCE” for what it truly is, a long term investment, which does not need to justify the “instant gratification” of the “short term” outlook of some shareholders.

I would also be remiss in my musings, if I didn’t address the lengths some will go to bash the stock and others to defend it. This is astonishing, to watch and can at times be simply befuddling.

The rationalizations by various shareholders are similar to the arguments posed by shareholders that UC has, by necessity, engaged in certain activities in order to ensure the “master plan” is executed without problems. We are lead to believe, there would be no benefit realized by “showing and or telling” what exactly is taking place with our company. So, we are allowed to believe what we want, but mostly that CMKX management is actually providing, through it’s actions and lack of communiqués a positive benefit to all shareholders. OK, I have no problem with that.

Similarly though, I do have a problem with “hero” worship and those who believe in CMKX so devoutly, they are more of a hostage to CMKX’s action or lack thereof, the will engage in some really abusive activities toward other not within their “group.”

People, it stands to reason, those who maintain a certain amount of skepticism in their belief system, have a “healthier” outlook on life in general, than those who view it from within a “protected” bubble. While the general consensus among all CMKXers holding long is, of which I am also a part of, is that CMKX is not a scam and it’s management are not evil people out to “rip us off.” The lack of assurances by the CEO to say something substantial, when he has the opportunity, is disconcerting, especially when our stock is taking a beating and those around us are realizing small to large monetary benefits.

While we assume that we are in a developmental stage and that patience is required, that patience displayed by some is more akin to a willing subservience. For example the zeal, by which a certain “classroom” of shareholders defends their leader and abuses those who oppose him and his ideas, is slightly strange. I find his ideas and commentary both informative and refreshing at time for their optimism, but his “works” need to stand on their own merits and no amount of “defending” by his “troops” should be necessary.

Dr.D, a man who I respect and admire, but not to the point of hero worship, explains his theory and allows it to stand on it’s on merit. That’s not to say he hasn’t responded to some who have taken exception to what he has said and or, has pointed out what they believed to be an “inconsistency” in his logic. Guys, that’s what our society is based on…the freedom to express yourself and disagree with others in order to arrive at the truth in a “given” situation.

I feel that such actions where blind loyalty is adhered to, in lieu of the facts are simply wrong and mostly related to

(a). a need to belong with those of similar interest, which I see nothing wrong there since
we are “social” animal by nature and or

(b). a need to identify with a leader and others on some level as a means by which they
will be protected from outside influences and ultimately their own judgment.

Going even further along these lines using the above mentioned childhood analogy, perhaps it is the love and care given by parents during their young and vulnerable stages of life which conditions some people to naturally accept and adore these “leaders” as a guardian, much like a person's parents, and the leader’s presence reminds people of the time when they were coddled, and all their wants and needs were provided for.


more....

[fastwalker]

continued....

OK, no need to attack me on that, I enjoyed being coddled as a child also, so it’s not a “slam” against them wanting something which was lost , when we “grew up.”<br>
But this raises a more serious question of what is the cure to such thinking. It is not simply, or even primarily, a matter of physical maturity, but of mental and emotional maturity. Just as children must take full responsibility for ordering their own lives, so do all those people who hang onto the “words” of their leaders, especially in those facets where a person may delegate responsibilities to others, such as a financial advisor for example, you must still review and even challenge the person you have made responsible for “taking “ care of your money matters. By making sure that person is performing in accordance with expectations and within the realm of acceptable reasoning for their conclusions.

The cure it would seem is to help people "grow up" and realize that they not only should take responsibility for their lives, but also at some point, take responsibility for their actions. The most effective way to accomplish this would appear to be really looking at the “good and bad “ sides of an issue and not assuming that by discussing the bad side in a positive and constructive manner, (and by that I don’t mean entertaining the ranting of a “basher” sorry bashers, I still don’t care to debate any issue with you)…it will somehow shake your faith and or bring about the demise of the CMKX EXPERIENCE and opportunity for realizing the benefits from the stock play of a lifetime..OK enough of that..now
we should look at another issue....

Which brings us to another point that I have seen being tossed around by the bashers and which I find even more disturbing and that is the idea that we are seeing a serious stock manipulation by the management of CMKX and the JVs.

Let me say right now, I don’t believe that is the case. But there will be some, mostly bashers who will use this premise to attack CMKX and influence the “uninformed” shareholders who may not know any better and be susceptible to such thinking, to their point of view, especially given the events with and surrounding CMKX.

With a little DD, I was able to find and now post some vary interesting information on this subject, most is a compilation of data, it is not designed to pump, CMKX in my opinion can and has stood on it’s own merits, but this bit of information is more to inform our less than “happy” shareholders on what and how this information can be used to manipulate their thinking process. So, FWIW.. the following is presented for your edification….


A less publicized and more sinister version of naked short selling on Wall Street, is called "short and distort." There is nothing inherently wrong with short selling, which is we now know is permissible under SEC regulations. But, the short-and-distort type of short seller uses misinformation and a bear market to manipulate stocks. Short and distort is as illegal as the pump and dump, but is mainly used in a bear market. It is important investors are aware of the dangers and the means of protecting themselves.

Short selling is the practice of selling borrowed stock in the hopes that the stock price will soon fall, allowing the short seller to buy it back for a profit. The SEC has made it a legal activity for several good reasons. First, it provides the markets with more information. Shorters (traders who practice selling short for a living) often complete extensive and legitimate due diligence to try and discover facts and flaws that support their suspicion that the target company is overvalued. Because most shorters are scrupulous and ethical, their actions are conducive to the health of the market. Finally, short selling also provides investors who own the stock (have "long" positions) the ability to generate some extra income by lending their shares to the shorts.
Now don’t jump on me for the preceding statement…… read on.
On the other hand, short and distort (S&D) traders manipulate stock prices in a bear market by taking short positions and then using a smear campaign to drive down the price of the targeted stock. This is the inverse version of the "pump and dump" tactic, whereby crooks buy stock (take a long position) and issue false information that causes the target stocks price to increase. (Ah yes…we know these people well..!)
Generally, it is easier to manipulate stocks to go down in a bear market and up in a bull market. The pump and dump is better known than the S&D because of the long bull market and the media. The stock market has been in a general up-trend since the early 1980s, which provided ample fodder for "pumpers." Movies like Wall Street and The Boiler Room helped educate investors about the risk of this type of stock manipulation.
The S&D schysters try to profit by stimulating fear. They will use online screen names that imply either that they are associated with the SEC or NASD, or that they can regularly spot worthless stocks. Their goal is to convince investors that every proponent of the stock has ties to the company and that the SEC is watching and will halt the stock. S&Ds also intimate that they are looking out for investors' interests. Short and distort players clutter message boards, so optimistic information cannot easily be found. "Get out before it all comes crashing down" and "Investors who wish to enter a class action lawsuit can contact…" are typical posts, as are their projections of $0.00 and loss projections of 100%. If their strategy is suspected by "longs," they attack the person that has caught them. The market manipulator will do everything in his/her power to keep buyers out of the stock and keep the price heading south.
The net effect is that the investors who initially bought stock at higher prices sell at low prices because of their mistaken belief that the stock is worthless, caused by an effective distortion campaign. At the same time, the S&Ds cover at low prices and lock in their gains.
In light of Enron and current market conditions, investors are more susceptible to this type of manipulation now than during the boom of the nineties. In this current market, the first appearance of impropriety causes investors to run for the hills. As a result, many innocent, legitimate, and growing companies are getting burned, and investors are getting burned along with them.
A few tips to help prevent this in the future:
1) Do not believe everything you read--verify the facts.
2) Do your own due diligence and discuss it with your broker.
3) Hypothecate your stock--take it out of street name to prevent the short sellers from borrowing and selling it.
The best way you can protect yourself is to do your own research. There are many potentially great stocks out there, but Wall Street is ignoring them. And even if the SDs attack your stock, you will be better able to detect their distortions and be less likely to fall prey to their distortions by selling the stock at a loss.
Another tool is to know the seven key characteristics of a good research report. Here is a brief summary of how to spot them:
1. Is there a disclaimer?
The SEC requires that everyone providing investment information or advice must fully disclose the nature of the relationship between the information provider (i.e. research analyst) and the company that is the subject of the report. If there is no disclaimer investors should disregard the report.
2. What is the nature of the relationship?
Investors can get some good information from pieces published by IR firms, brokerage houses, and independent research companies. Using all of these sources will provide information and perspectives that can help you make better investing decisions. You need, however, to evaluate their conclusions in light of the compensation (if any) that the information provider received for the report.
Can a Wall Street analyst who is even partially compensated by trading generated by the report be more objective than a fee-based research firm that is paid a flat monthly rate with no "performance" bonus? The answer to this question is left for each investor to decide, but both reports are available to use for evaluating a potential investment. The nature of the compensation will provide information to help you evaluate a report's objectivity.
3. Is the author identified and is his/her contact information provided?
Generally speaking, if the author's name and contact information is on the report, it is a good sign because firstly it shows the author is proud of the report and secondly it gives you a way to contact the author for additional information. Research reports from legitimate brokerage firms post the author's name and contact information near the top of the front page. If the author's name is not given, investors should be very skeptical of the report's contents.
4. What are the author's credentials?
Letters after a name does not necessarily mean that the author of the report is a better analyst, but they do indicate that the analyst has undertaken additional studies to expand his or her knowledge of finance and investing.

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[fastwalker]

continued....

5. How does the report read?
If the report contains a lot of grandiose words and exclamation points, beware. I'm not saying that good analysts are boring, but good reports don't read like the National Enquirer. We try to make it interesting, but a reputable analyst would never use exaggerations like "sure things" or "rockets," and they would never suggest that you mortgage your home to buy a stock.
Objective research reports provide reasoned arguments to buy or sell a stock. Key factors such as management expertise, competitive advantages, and cash flows are cited as evidence to support the recommendation.
6. Is there an earnings model and target price with reasonable assumptions?
The bottom line for any recommendation is the earnings model and target price. The assumptions upon which the earnings model is based should be clearly stated so that the reader can evaluate the reasonableness of the assumptions. The target price should be based upon valuation metrics, such as P/E or P/B, that are also based upon reasonable assumptions. If a report lacks these details, it is generally safe to assume that the report lacks a sound basis, and investors should ignore the report.
7. Is there ongoing research coverage?
A commitment to providing ongoing research coverage (at least one report per quarter for a period of at least one year) indicates that there is a solid belief in the fundamental strengths of a company. It takes a lot of resources to provide this type of coverage, so a firm providing ongoing coverage is a sign that the firm legitimately believes in the long-term potential of a stock.
This contrasts one-time reports that are used to manipulate stocks. In these cases, supposed research firms will suddenly issue "reports" on stocks they have never reported on before. Generally, these reports can be identified as an attempt at stock manipulation because they will not contain the attributes of a legitimate research report (discussed above).
The conventional wisdom is that any trading scheme that is not for investment purposes but, rather, for the purpose of inflating or deflating the market price, namely, manipulation, is fraudulent. This paper treats manipulation as a form of communication between the manipulator and the market. As with any communication, it may sometimes be fraudulent, but often it is based on the manipulator’s knowledge, or genuine belief, that a certain stock is being traded at a discount (or premium). Under the assumptions of the CAPM, such an informed party should use this information to trade for investment purposes only, but liquidity and risk constraints, which are ignored by the CAPM, often do not allow him to invest; instead these constraints force him to bid the market up (or down). The manipulator’s effect on the market arouses analyst attention and induces the market to update its evaluation of the firm’s value. The more liquid the market, the faster the market updates its evaluation of the firm’s value, and thus the greater the value to the manipulator if his scheme is based on information.
I support this theoretical claim with an empirical study of stock manipulation indictments brought by the Israeli Securities Agency during the last decade. The study treats each indictment as a competition between two rival analysts: the Agency, which recommends a “hold” at the pre-manipulation price and a “sell” at the post-manipulation price, and the manipulator, who recommends a “buy” at the pre-manipulation price and a “hold” at the post-manipulation price. Examining the long-run performance of the forty-five stocks that were the subjects of the indictments, I find that investors could gain by following the advice of the Agency. However, the long-run performance of the twenty-two most liquid stocks shows that these stocks experienced a significant positive abnormal return. This finding provides support for my claim that information is a driving force behind many manipulative schemes, especially those that are conducted in liquid markets
Look before you leap is sage advice for arbitrageurs and stock investors poised to snap up shares of a hot stock. But an inexplicable boost in the price and volume of a company's stock in the absence of good news actually may be the work of a stock manipulator who drives up the price and then profits by selling the artificially inflated shares.
If many manipulators are engaged in deceptive practices, average traders seeking valid information about a firm’s prospects and the true value of its stock may be driven out of the market, thereby reducing its efficiency. Although it’s too late to help those who lost money on Enron, Worldcom or Tyco, there are lessons to be learned, says Guojun Wu, assistant professor of finance at the University of Michigan Business School. Wu and colleague Rajesh K. Aggarwal of Dartmouth College’s Tuck School of Business studied 51 of 142 stocks involved in litigation with the Securities and Exchange Commission over stock-market manipulation from 1990 to 2001. In their analysis and modeling, they observed most manipulation cases occur in small, illiquid markets, such as the OTC Bulletin Board and the Pink Sheets, which have much lower disclosure requirements for listed firms and less stringent securities regulations.
Their study, “Stock Market Manipulation---Theory and Evidence,” found that corporate insiders, brokers, underwriters, large shareholders and market makers are more likely to be stock manipulators. The reason, they say, is that these individuals are close to the information loop, so it is easier for them to pose as informed parties who have knowledge about the future value of stocks.
The most common type of manipulation, is inflating the stock price through wash trades and the use of nominee accounts (owned by essentially the same individual or group). The increased trading volume and price often attract the attention of investors or information-seekers. Some manipulators also gain unfair advantage by spreading false information through stock promoters, news releases, SEC filings and Internet chat rooms and bulletin boards to encourage other information-seeking investors to purchase shares. The more information-seekers who can be drawn in, and the greater the market’s uncertainty about the true value of the stock, the higher the manipulator’s returns are likely to be, the researchers say. Manipulation also increases stock volatility, with stock prices rising throughout the manipulation period and then falling afterward.
Wu and Aggarwal argue that government regulators must play a strong role in discouraging manipulation while encouraging greater competition for information. “These results are consistent with our model and suggest stock-market manipulation may have important impacts on market efficiency,” Which was born out in the courts…<br>The United States District Court for the Southern District of New York recently held that a defendant may be liable for manipulating the price of a stock under Section 10(b) of the Securities Exchange Act of 1934 (the "1934 Act") "even if [the defendant] believes the stock is underpriced or even if in fact the stock is trading below its actual value."
In a RICO and securities fraud prosecution, defendant Gordon Hall argued that there can be no liability for stock price manipulation as a matter of law unless the subject stock was trading at an artificially high price, i.e., above its actual value or true worth.
In support, the defendant's expert offered an "economic definition of 'manipulation,'" contending that if a stock is not trading above its real value, by definition, there can be no manipulation. Conversely, defendant's expert opined that if a stock is underpriced, or trading below its actual value, a defendant cannot be guilty of manipulation "merely because he attempts to bring the price up to where he believes it ought to be."
Judge Denny Chin rejected the defendant's assertion, stating that it "simply d[id] not make sense." First, the court observed that Section 10(b) proscribes - without exception - the use of "any manipulative or deceptive device or contrivance in contravention" of the Securities and Exchange Commission's rules and regulations. A fraudulent scheme to manipulate a stock's price is thus unlawful, the court held, even if the goal is to bring the stock's price closer to its "true worth."
Second, the court opined that whether a stock is trading at an artificial level does not turn on the "true worth" of the stock, as the defendant asserted. Rather, the court ruled that a stock price is "artificial" when it is at a level above what market forces would otherwise dictate. The court noted that a fraudulent scheme to manipulate necessarily alters the market forces that dictate the price of a stock, and thus results in an artificial stock price.
Third, the court noted that defendant's "true worth" theory was unworkable because liability thereunder would turn on "the vagaries of valuing stock," a largely subjective process. Finally, the court ruled that "even if the defendant [were] trying in his mind to correct the market," such "ends do not justify the means" of unlawful manipulation. The court thus concluded that Hall's counsel could not argue to the jury that unlawful manipulation occurs only when the stock is trading above its actual value. *
United States v. Hall, - F. Supp. 2d - , No. S1 97 CR. 1215(DC), 1999 WL 292624 (S.D.N.Y. May 4, 1999

So you see Guys, there are many reasons why the UC’s interview was less desirable from our standpoint, than maybe from his standpoint of simply being a constrained legal standpoint.

Just some more musings….FWIW.

[azesm]

May I make it sticky? Or send it into DD or/and Ivesting 101?
Or all the above?

It's a very good post. I would say a basics for everything we do (ok, I'll talk for myself), not only CMKX, not only trading.

Thank you, FW!

[fastwalker]

;D Sure......AZ, I would never be so presumptious as to make my own stuff sticky...figured no one reads it any how...lol