A word about posting price targets

[Joe Blow]

I have noticed some members posting price targets for stocks that are anywhere from ten to twenty times the current trading price of the stock and I am increasingly becoming uncomfortable with this practice. In my view without anything substantive to back it up with these kind of predictions are simply a form of ramping. If you are going to give a price target for a stock that is significantly above its current trading price I expect you to back it with some fairly comprehensive analysis or else I would prefer you not to do it.

Lets not let this sort of thing get out of hand.

[twojacks28]

hi joe i guess im one of those. what happens if im am just stating what the reaserch report said?

[Joe Blow]

hi joe i guess im one of those. what happens if im am just stating what the reaserch report said?

Twojacks, I'm not talking about modest price targets or if you are quoting a price target in a report by a broker. What I'm referring to is price targets like "This stock will definitely be $5 in six months! Get in now!" when the stock is currently trading at 30 cents.

All I am asking is that those making such claims back up their view with some kind of analysis so the rest of us can see and evaluate their reasoning.

Hope that makes things a little clearer. :)

[twojacks28]

ahhh no you cant do that they are just tryin to pump the prices up. i bet they're new users as well. goodluck joe

[Smurf1976]

Well said Joe. Let's see some proper analysis, either technical or fundamental, rather than blatant ramping. That's what sets ASF apart from other stock forums in the first place.

[visual]

Joe,maybe they are not ramping (she says tongue in cheek) maybe they are sharing information meant for someone else,highly confidential information .I must get 20 of these confidential reports every day, telling me to buy before it`s too late.Generally I no longer even bother to look at them,straight to spam.So good on you for stopping this practice here. :p:

[>Apocalypto<]

if they are silly enough to buy the stock after reading that then they deserve a good burning!

:band

[dannow]

:rolleyes: me never do that! Honest! Joe looks suspiciiously like Marlon Brando..(mumbles mumbles) Lol:D

[RichKid]

:rolleyes: me never do that! Honest! Joe looks suspiciiously like Marlon Brando..(mumbles mumbles) Lol:D

You should have seen the old one....Joe's getting soft in his old age ;) ...but we'll all get to see the old Joe if those price targets look suss!! lol

PS Joe's old avatar was of The Devil (aka The Boss) with two horns, a wicked grin and plenty of fire in the background.

[OzTrade]

Joe Blow,
If newbies are so gullible to go out a buy a stock simply based on a post on this website then I say let it be?
The stupidity will not last long as they will soon realise that trading is not that easy.... what I mean is that if they are so stupid to go and buy something without doing there own research then they will soon learn.

Actually I don't think it's much different to listening to a brokers report?
How many brokers really know?
I'm sure most of your members have listened to their brokers and lost money from time to time?
I know I have, so why is it any different?

[prawn_86]

I know I have, so why is it any different?

In Joes absence i will answer.

Brokers are licenced to give financial advice by ASIC (good or bad they still have the licence), whereas general ASF members are not (unless you can prove you are). Stock forums are actually governed by ASIC, hence any price targets here can be deemed as advice and both ASF and the poster can be liable for that 'advice'

Hope that helps answer your question.

[Joe Blow]

Joe Blow,
If newbies are so gullible to go out a buy a stock simply based on a post on this website then I say let it be?
The stupidity will not last long as they will soon realise that trading is not that easy.... what I mean is that if they are so stupid to go and buy something without doing there own research then they will soon learn.

Actually I don't think it's much different to listening to a brokers report?
How many brokers really know?
I'm sure most of your members have listened to their brokers and lost money from time to time?
I know I have, so why is it any different?

If a price target is not supported by some kind of analysis then what value does it have? None really. It's either a ramp or a downramp depending on whether it's a bullish or bearish price target.

If those posting are going to post a price target then they need to present their reasoning along with it. That gives others something to critique and debate. It may also help to stimulate further discussion.... and isn't that what forums like ASF are all about?

[trainspotter]

How does this effect ASIC? If we are right in our analysis is this considered advice? If we post our reasons as to WHY we believe it should get to a target market and the stock does not achieve ... are we liable? Or is there indemnity upon such advice in ASF? Is it considered no more than talking to someone down the pub?

[cuttlefish]

Stock forums are actually governed by ASIC, hence any price targets here can be deemed as advice and both ASF and the poster can be liable for that 'advice'

Hope that helps answer your question.

Good question trainspotter. Prawn - where does this information come from? How can someone posting their personal opinion of where a stocks price might head be deemed 'advice' under ASIC rules?

As trainspotter said - whats the difference between someone on a stock forums saying "I think XYZ will go to $100" and someone chatting in a pub saying the same thing.

Joe Blow could you comment on Prawns post above - it seems illogical but nothing would surprise me from ASIC - but a clarification on how ASIC treats opinions supplied in conversation on a forum would be of use to posters I'm sure.

[Joe Blow]

How does this effect ASIC? If we are right in our analysis is this considered advice? If we post our reasons as to WHY we believe it should get to a target market and the stock does not achieve ... are we liable? Or is there indemnity upon such advice in ASF? Is it considered no more than talking to someone down the pub?

Posting a price target based on some form of analysis is not really "financial advice", it is general discussion. Telling someone to "buy" or "sell" a particular stock is a different story, however. That is why "buy" and "sell" recommendations are not permitted here at ASF. We do not allow anyone to offer specific financial advice to anyone else nor do we allow people to advise others how to invest their funds.

If you are interested in ASIC approach to internet discussion sites like ASF you can read ASIC's Regulatory Guideline 162, which is currently under review: http://www.asic.gov.au/asic/pdflib.nsf/lookupbyfilename/ps162.pdf/$file/ps162.pdf

[trainspotter]

I have noticed some members posting price targets for stocks that are anywhere from ten to twenty times the current trading price of the stock and I am increasingly becoming uncomfortable with this practice. In my view without anything substantive to back it up with these kind of predictions are simply a form of ramping. If you are going to give a price target for a stock that is significantly above its current trading price I expect you to back it with some fairly comprehensive analysis or else I would prefer you not to do it.

Lets not let this sort of thing get out of hand.

Ummmm .......... I am extremely unstable with this position. This would be called ramping would it not? Substantive or not it could be misconstrued as advice in some manner. I am sure there are legal precedents whereby "guilty" people have suffered the full extent of the law. Need to google rummage for the full details.

[trainspotter]

Posting a price target based on some form of analysis is not really "financial advice", it is general discussion. Telling someone to "buy" or "sell" a particular stock is a different story, however. That is why "buy" and "sell" recommendations are not permitted here at ASF. We do not allow anyone to offer specific financial advice to anyone else nor do we allow people to advise others how to invest their funds.

If you are interested in ASIC approach to internet discussion sites like ASF you can read ASIC's Regulatory Guideline 162, which is currently under review: http://www.asic.gov.au/asic/pdflib.nsf/lookupbyfilename/ps162.pdf/$file/ps162.pdf

Thanks Joe .. will investigate further. FYI ...My understanding is this kind of "advice" being a written form is the grey area they are concerned about.

[Joe Blow]

Ummmm .......... I am extremely unstable with this position. This would be called ramping would it not? Substantive or not it could be misconstrued as advice in some manner. I am sure there are legal precedents whereby "guilty" people have suffered the full extent of the law. Need to google rummage for the full details.

You are never going to stop people posting FA based valuations or technical targets based on their TA. However, as I mentioned, any valuations or price targets must be accompanied by some analysis to give them context.

[trainspotter]

You are never going to stop people posting FA based valuations or technical targets based on their TA. However, as I mentioned, any valuations or price targets must be accompanied by some analysis to give them context.

Cheers Joe ... just ensuring there is the right amount of coverage over the posterior on this subject. Would not like to see a case example brought to the attention of the media without the proper info being out in the domain of the posters of ASF. Up to them to comply with the requirements from here on in. :eek:

[trainspotter]

LOLOL ...I just googled "ramping stocks and law cases" from Australia and I got an ASF thread from 2004 !!! LOLOL.

http://www.aussiestockforums.com/forums/archive/index.php/t-566.html

Nothing to do with the thread but I found it amusing anyways. Keep up the good work JB. Onya !!

[Tanaka]

Does this also apply to shorting targets? i.e "ELD will be worth .03 cents by the end of the year?" :p:

[Joe Blow]

Does this also apply to shorting targets? i.e "ELD will be worth .03 cents by the end of the year?" :p:

Yes, all price targets must be accompanied by analysis or at the very least detailed reasons for your point of view. A price target is essentially placing a future valuation on a company and others should be entitled to review, and perhaps critique, your reasoning/analysis.

[Boggo]

Just wondering where we stand when I put up charts such as the one below, ie, a software generated set of conditions and projected targets.

Is this ok with minimal explanation (is it self explanatory).

Thanks Joe
.

[Joe Blow]

Just wondering where we stand when I put up charts such as the one below, ie, a software generated set of conditions and projected targets.

Is this ok with minimal explanation (is it self explanatory).

Hi Boggo,

Yes, that's fine. It's fairly self explanatory.

The only reason I insist on some kind of analysis is to keep a lid on blatant ramping/downramping. I don't mind whether the analysis is TA or FA, or a combination of the two, as long as it explains how the price target was arrived at.

[Joe Blow]

Recently I have noticed a proliferation of random price targets being posted in stock threads without any attempt at justification.

I want to make this very clear: If you post a price target you must explain your reasons for arriving at that price target, otherwise it's just ramping. Is it a technical target or a valuation based on fundamentals? If it's based on technical analysis then a chart would seem to be almost mandatory as well as an explanation of your TA. If it's a valuation based on fundamentals then it goes without saying that you will need to explain how you came to arrive at that valuation. If you take the view that announcements will drive a particular company's share price then you need to also post what news is expected and why you are anticipating a particular outcome.

I realise that there is quite a bit of no/low content ramping on many of the other stock market forums, which makes it difficult for us to raise the bar, but we do try and maintain a higher standard of posting here. You must back up all your assertions with an explanation or analysis, particularly price targets. Failure to do so may result in your post being removed and an infraction issued.

We also ask that ASF members report posts in stock threads that they believe qualify as no/low content ramping. Although the moderators and I do our best to review as many posts as we can, it just isn't possible for us to get through them all. The assistance of ASF members in helping us to identify posts that are in violation of the site rules is greatly appreciated.

[Joe Blow]

Just a brief reminder about posting price targets:

If you are posting a technical target (either bullish or bearish) please include a chart that illustrates your analysis. If, for some reason, you are unable to post a chart, please describe your analysis in some detail, being sure to identify any relevant support or resistance levels.

If you are posting a price target based on a fundamental valuation, please be sure to describe in some detail how you came to arrive at that particular valuation.

The more content you post, the more useful your post will be to others.