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Thursday, February 17, 2011

Message boards

There was an illuminative exchange in the comments after this post from a week ago:

The point of the post about Guy de Chimay was to show how sociopaths can actually enjoy their ill gotten gains even when they know their whole scheme is about to unravel.

I had never heard of xG Technologies before, but a couple of people involved with the company evidently had internet feeds set up to alert them whenever anybody related to the company -- such as Guy de Chimay, who was slated to buy stock in the company -- appeared on the net. They saw the post.

The first commenter, who is probably short the stock, pointed out that xG Technologies itself was "stuffed full of sociopaths." Then someone else commented, "Anon sounds like you are some kind of wannabe shrink on line...I wonder if you would identify yourself and mention your theory to Col. Coleman [who works for xG]. He probably would blow your stinkin head off!"

At this point I wasn't sure whom to believe. These types of battles between longs and shorts play out all the time on the Yahoo stock message boards. It's often hard to tell who is telling the truth and who isn't. Sometimes the company being discussed has a good product and is well run and is unjustly attacked by shorts who lie in order to push the price down. And sometimes the company is essentially a scam, and it's the shorts telling the truth.

Oftentimes by reading between the lines you can tell who the good guys and who the bad guys are. The good guys tend to stick to factual debate, and generally sound more intelligent. The bad guys tend to engage in personal invective and pseudo macho posturing. They often type in all caps, boast about their personal wealth, contradict themselves, and show their hypocrisy. They also attack other commenters on specious personal grounds.

Neither of the commenters here did all of those things. But one of them did a few of them. Check out the exchange in the comments after the post linked above and decide for yourself which side you would put your trust in.

I made that judgment for myself, based purely on the comments after that post, and woke up last Friday intending to short XGT.L. But when I looked it up, I saw that it was trading at fourteen cents, down from a high of roughly $17.50 back in 2007.

The market had already rendered its verdict.

Look for more nasty comments after this post.


Anonymous said...

Most people like to buy low and sell high...don´t know what your strategy is.
Nobody knows who xG is, and it looks like your moment of truth was too little too late. Is this comment too nasty for you? I for one have been involved in xG since before they were xG and I have made money up down up down and now up again...

Anonymous said...

Oh and John before you apply your theory to my post, I did not say anything about how much money was made, nor did I say it in a bragging manner...I did say it in a way that your time has come and gone to short the stock and the negative comments about xG by a very few will be negated themselves by real business from the co. The fact that the stock is traded anywhere from .05 to .20 on any day should be an indication to any halfway intelligent stock buyer that there is no market for the shares. John you are remiss in your assumption that the "market has spoken". Check the restrictions on the stock and the trading float.
Again, I hope this wasn´t too nasty for you, John.

John Craig said...

OK, let's keep an eye on it.

I've seen stocks come back from this kind of valuation, but most don't.

Anonymous said...

John, I appreciate what you are saying but I know you are being kind. No stock has ever come back from this type of loss of valuation, but xG was not your typical listing from the beginning.
Lots of changes in the co. and to your original point of Chimays involvement...even though he was a fraud he committed to 30 million dollars in equity investment in xG when you work it all out including deals I am aware of. I´m not going to give you a full history of xG but yes...keep an eye on it.

John Craig said...

Actually I can name one off the top of my head: VRML. It hit a low of two cents when it looked as if they were going to declare bankruptcy a while back. But they didn't, and as of last summer the stock had climbed back to a high of around $29 (it's now at five dollars and change).

But yes, very few stocks experience this kind of comeback.