Pinkyland and the dying fish theory

If you have ever traded in the pinksheets one thought comes to mind: Death thru buy button.

Your experience starts like this (insert now). You need some fast cash and a friend turns you on to penny stocks. He whispers in your ear "message boards, chat rooms, charts (oh my). You start reading message boards, sign up for chatrooms, and become determined to chart the stock.The adventure begins in an enchanted place called "Pinkyland" (rabbit hole, RAAABBIIIIIIT HOOLLLLE). Confidence starts

You are a nuuubi and cannot tell an RSI chart from an EKG chart. You are told MACD's, DD's, MM's, and L2's are the keys to the kingdom. Your head is swimming. You become determined to understand it all, and start stock school on stockcharts.com. As you read ( if one can truly understand stock formulas for behavior), you become enlightened to the size and shape of a bull run or a bear crawl. Confidence shaping.

You go to web sites promoting pinksheet stocks and start charting your course through countless symbols and news stories. Pinksheets.com is used to determine the reporting history, due dilligence (down and dirty more like it)and performance indications. You call companies for their goals and outlook. you are given glorious news about upcoming events and growth (companies never fail:). Confidence building.

Now comes the next phase. You start an online account with a brokerage firm and place your entire savings into the account ( mine was $63.71)feeling a warren buffet type euphoria never felt before. Confidence is high.

You return to the message boards and read messages touting stocks never heard of before. These stock are being chatted (hyped and pumped) about in animated fashion. You see messages like: stock A soaring, get in now, weeeeeeeeeeeeeeeeee. Messages pop up leading you to their site for further information (interrogation and brain washing). Finally you choose your stock. Confidence soaring.


Homework is done, charts plotted (like Patton crossing the Rhine), chatroom links on, game day arrives. The bell rings and catches you daydreaming about mansions and martinis. You frantically push that buy button, lean back in your chair, and start online chatting about how the stock is growing (because the day before it hit 2000%) feeling that the world is a better place. Confidence level stuck in strut.

As you watch the ticker fly by (about as much as fun as watching paint dry), you see a drop in stock price. Thinking market price correction, you send more money funneling into that buy button. MM's looking good. L2 shaping up, chatroom abuzz. Warning Will Robinson, Confidence overload.

You sit and watch and the stock keeps falling. You try to pump it up online with words of encouragement, but that sinking feeling starts to come from nowhere. Confidence level abating.

At the end of the day nothing happens. Chatroom buzz is only from those who bought at the peak needing reassurance. Those who pumped it went on to new stocks. At the end of the trading week after some swings up and down and no where near where you bought it at ( insert flippers here) you see the stock return to the price level it was stuck at for months. Confidence waning.

You get the courage to see where you failed on your charting and a revelation happens. You see the flatline, then the blip, then flatline again just like when a fish lies on the ground, then suddenly flops around gasping for air only to return to stillness (dying fish theory). Confidence deflated

Moral of the story. watch your charts. if the stock is flatlined for months then hype comes a knocking, never get into it. Pumpers have already marked it for a hike knowing it will die just as suddenly as it sprang to life. Good luck to all.