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mardi 22 mai 2012

INT ??? Time to panic or not???

For the last couple of weeks, INT shares have been trading lower and lower and lower on very low volume. I must insist on this fact LOW VOLUME.

If it continues like that, soon INT shares will be worth the same price as the dividend WITHOUT taking into account the value of Ortsbo that will be retained by INT.

This simply does not make any sense. Could it be shorters?

Interestingly many will say NO because the reports are indicating less than 1 Million share shorted. But wait a second: that is the qty shorted at the report date. I do believe that shorters are smarter than leaving their position open for that long...(15 days between reports) as they know like everyone of us that news could be at the corner so the name of the game is short than cover asap.

With the low ask and bid that we have now, it is easy to short and cover very rapidly. When you short let's say 35K shares as long as they are prudent and read correctly the ask, they can cover very very rapidly and pocket a good shunk of money each time. If you end up doing a 3 cetns spread, you just earned 1,000$.

So what is to do: 2 possibilities:

1) You have done your due diligence and you believe in the future of INT and Ortsbo: nothing to do. Take the opportunity to average down your position if you have enough profit on the side from other stocks.

2) You do not believe in Orstbo and INT: go back to item 1 and redo your own due diligence. If you still do not believe in INT why where you invested in anyways???

There will be some more weeks of turbulence ahead of us (the longs) and some time it is best to forget looking at the stock value day after day or even worst at every minute. If you did an investment for a year, then come back in 12 months...If you made an investment for a week: to bad you are acting like a trader and must suffer a trading loss ON PAPER until the real game starts.

Just for the math lover in you: 1% of stock traded in 1 day = 4M shares (or close to that number).

So do you really think that if a major problem had arise for INT that volume would be that low??? If there was a real material event it would have to trigger 25M to 40M shares to be traded in 1 single day and shares would be worthless.

So is this what we are looking at now? NO WAY. This is exactly what happen when there is simply no bids.

Need an example: UUU (tsx) on last friday suffered a sale of over 1M shares at market price and the drop was so significant that it did trigger the one stock circuit breaker for about 6 minutes (drop was over 10% on 1 single trade). Guess where UUU was trading today??? Come on do your due diligence and have a look by yourself. You will find it interesting.

The lesson to be learned is easy: All companies MUST report in due time any material change or situation that would affect either positively or negatively the value of their stock. This MUST BE DONE in a timely manner.

So no news: no problem. Delays: well it could be as they need approval of TSX to trade on their index instead of the Venture and there are many rules that they have to obey to.

As for myself, i am still long and will most probably use that trading time to add to my position. I have not sold any of INT since a long time (well abovce the 0,60) and still own a good chunk of they available shares. (Unfortunately i cannot give you the exact number here...)

I have also seen on some BB many posters trying to foresee the future for INT as being so negative that you should sell them all and go away licking your wounds...Come on, who are these guys: angels of shareholder protection ? Mystery people that want to protect YOU at all price? Gurus that have nothing to do except educate people AFTER they would have made a bad investment???

No.. These people are in only for one reason: profit from the weak hands and get cheap shares. If that was  not the case, do you honestly believe that they would spend the time writing negative reports on companies they do not want to own and only to protect the small retail investors?

That kind of people do exist like Santa Clauss and The Easter Bunny.

Have a good trading time.  

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