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[Dr Who]

Calling all high volume traders?

Is there in correlation between share price and share picks given on BDTV ( the old Summit TV )? I have often wondered if demand is created based on stock tips which may drive up the value of shares in the short term?

Thanks

 

[Jehosefat]

Get the data yourself and have a look?

I wouldn't imagine so though. I highly doubt that much volume is driven by those tips.

 

[Wyzak]

There's an old saying that if you hear about a stock on the news it's already too late to invest in it.

 

[The_Ogre]

Never follow those tips!

 

[Hendrix]

It might, but only slightly, very slightly.
Remember, Asset Managers are the ones with big bucks to buy shares, and they don't listen to those stock tips.
The average man on the street won't really influence demand and hence the price.

 

[Jozsef Borbely]

It might, but only slightly, very slightly.
Remember, Asset Managers are the ones with big bucks to buy shares, and they don't listen to those stock tips.
The average man on the street won't really influence demand and hence the price.

Agreed. But another point to consider is that a large asset manager like Allan Gray or Coronation can not change their holding in a company quickly just because of the massive size of their position. So movements in a stock either up or down ON A DAILY BASIS is highly driven by speculators, such as futures traders, which are mainly the average man on the street. (on a side not this is why they cant invest in smaller more profitable companies because even a 0.5% holding in the unit trust might be a 50% holding in a small company.)

South Africa at a stage had the largest futures market in the world. Not sure if that is still the case.

The point I'm trying to make is that if these traders watch the same broadcast indicating that share X is a great buy then everyone buys it, which pushes the price up and everyone thinks that they are geniuses. It becomes a self fulfilling prophecy in the short term.

Red Hot Pennie Stocks was a great example of this phenomenon.

 

[Jehosefat]

JSE is down to around the 20th biggest futures exchange by volume. They were the biggest back in around 2007 or so as SAFEX if I recall correctly.