More signs of Speculation

I am working on a column on Stock Tips, and in my research I came across this unbelievable chart. Its from Jason Goepfert of Sentimentrader.com.

Jason had done some prior studies on the Bulletin Board volume. He wrote back "It’s even more crazy than last month – share volume expanded by nearly 40% over the previous record, set in February. I’ve attached the chart."

>

Astonishing:

Otc_bb_volume_041906

>

That is some spike relative to the prior volume — it looks similar to January 2000.

Good thing there is not any speculation around . . .

 

What's been said:

Discussions found on the web:
  1. Mark commented on Apr 20

    Barry-

    Nice exit from your Gold position. When do you come out with your Precious Metals timing newsletter? 🙂

  2. Barry Ritholtz commented on Apr 20

    Thanks! I had covered the short around 550 and went long. I finally had to take something off the table on the parabolic spike —

    Short term, it might go higher, but it will have to be without me.

    Longer term, I can imagine $800 as a target. But these idiotic calls for $39,000 an oz were just too silly to keep me in the trade …

  3. McSwiggen commented on Apr 20

    And a good place to see where a lot of that speculation is occuring is at this site: http://www.pinksheets.com/index.jsp
    How about any analysts out there with some data regarding a possible slowdown or recession?
    McSwiggen

  4. blue][erring commented on Apr 20

    it also looks like the spike of early 2002 and late 2003
    and also, what is that? early 2005? let alone the spike of 1996..
    the difference is that the 2000 spike was at the same time as a one year doubling of the Naz. maybe chasing unsustainable returns. the reduction in volume following the 2000 spike correlates to the Naz decline, same with the drop off in volume following the 2002 spike (though not as much). but the late 2004 drop off in volume doesn’t correlate to any Naz drop off nor does the drop following the 2005 spike in volume.

    in fact, just saying, it looks like a spike in OTC volume as the Naz breaks through multi-year highs, and approaches the shoulders of the Great Naz Run of a long time ago (6 years!).

    -][

  5. royce commented on Apr 20

    Small caps have been raging so long and are now priced so much higher relative to large caps that we’re seeing the “follow the returns” effect as retail investors pile in?

  6. emd commented on Apr 20

    that chart is scary

  7. B commented on Apr 20

    Hey,
    Can someone tell me the legalities of destroying currency? I read where the copper in pennies has a 30% premium over the price.

    So, if I buy $1 million worth of pennies and take them down to the neighborhood metal pits, can I make $300,000? Then I’d go back, buy $1.3 million in pennies and make $330,000 and on and on and on.

    I figure by the time it’s all said and done, I could be as wealthy as George Soros. I’m going to corner the penny market.

  8. SINGER commented on Apr 20

    Barry…

    How bout the action in the market today…

    Silver and gold murdered…

    Plus the strange incongruity w/ the dow up huge on GM nazz down and a stealth move lower on the ever rising russ 2k..

    think we hit those high you looked for in your year forecast or do we move south here…

    I like Michael Darda today on CNBC in a battle w/ Leisman simply saying russ 2k + huge move in metals + $70 = excess liquidity….

    We’ll see what happens …
    Love the site and all things you post which tend to make me learn about the game..

    Back to writing a damn paper for Law School on the Judicial Culture’s Idea of what Democracy Is…On a side not do you think the two party system is worth protecting???

    Can’t wait to graduate…

    Peace in the Middle East

    SINGER

  9. B commented on Apr 20

    Btw, I need to borrow a dump truck if someone has one. I calculated this will be about 7,000 pounds per load.

  10. Mark commented on Apr 20

    I say B gives us his home address and everyone start mailing B their pennies in return for a photo on this blog of him standing in front of the metals pit with a wheelbarrow full of copper! Who’s in on this?

  11. Mike commented on Apr 20

    Shit, Barry got out of gold? I’ve been out since January.
    Barry, you’re a god damn jedi knight if you stayed in
    this long and just pulled out.

    Where was this announced? I don’t see it anywhere on
    the blog.

    Is this what I get for not tivo’ing Kudlow???

    Good call!!!!

    ps, would it kill you to let us know when you get out of EWJ?

  12. Alaskan_Pete commented on Apr 20

    B, I seriously doubt it. I recall that most of the content of pennies these days is actually zinc, rather than copper. It’s like a surface cladding of copper with a gooey zinc nougat filling. Of course, if you have a smelter or something that could seperate it…have fun.

  13. Uncle Jack commented on Apr 20

    “Btw, I need to borrow a dump truck if someone has one. I calculated this will be about 7,000 pounds per load.”

    Doesn’t this fall under that scenario where Kramer and Newman were trying to find the profitability of recycling cans?

    The cooper content in pennies was changed in 1982. So, you’ll have to run around finding 24 yr old pennies to make it worth your while, a real time killer, and therefore not very profitable. Unless you can get the extra truck on Mother’s Day. 🙂

  14. B commented on Apr 20

    The copper content has been changed numerous times. I’m talking about the current content of a penny minted today. If, indeed this is true. I haven’t validated it. I’d be generous with the buyer and let them have any incremental copper they receive using older pennies that would undoubtedly be included.

  15. Barry Ritholtz commented on Apr 20

    I mentioned the Gold sell in a comment (lawyers be damned)

    EWJ I am still short, and just about break even

  16. B commented on Apr 20

    Holy SH*T. Silver is now down 15%!!!! LOL!

  17. ndk commented on Apr 20

    The metal in pennies is worth about $0.0077 right now. Getting close…

  18. Mark commented on Apr 20

    Barry-

    I used Cramer’s show as my sell sign on the metals. When he jumped aboard I knew we were close to a top. 🙂

    Were you trading GLD only or miners?

  19. Alaskan_Pete commented on Apr 20

    NDK, where did you source that figure?

    Add transport, separation, assay costs, and you need that figure to roughly double before it would be worth destroying the pennies (which is illegal, AFAIK).

  20. me commented on Apr 20

    “I mentioned the Gold sell in a comment (lawyers be damned)

    EWJ I am still short, and just about break even”

    Didn’t you buy IBM too? Alright, maybe you did sell it two days later but still.

  21. Bear Mountain Bull commented on Apr 20

    Off the Board

    I saw the articles a few weeks ago about the huge jump in trading volume in the OTC / Bulletin Board stocks. Those articles were talking about the record volume done in February. Well, according to Barry at The Big Picture, the speculative frenzy did…

  22. Ricardo commented on Apr 20

    So share volume is up in all the cheap s.it? Or is this a dollar based volume on OTC BB’s?

  23. todd commented on Apr 20

    That chart is a little goofy… it’s the DOLLAR volume, not share volume. Plus, investors have to trade more in a sideways market to make money, so it’s not all that shocking.

  24. wcw commented on Apr 20

    While I sense a lot of speculation in today’s markets, there is one irrational reason for increased pink-sheet volume that actually makes sense long-term: non US-listed and -domiciled names. Sure, we should all have broker’s who’ll trade ordinaries for us in London and Hong Kong, but if we don’t and we want exposure to big names like Miller (SAB in London, or SBMRY on the pink sheets) or Hutchison Whampoa (0013 in Hong Kong, HUWHY [iirc] on the pinks), then OTC names are useful, if wide-spread, alternatives.

    Given what non-US and especially emerging markets have done these last few years, I’m hoping the real dollar volume is in some not-quite-as-stupid-as-it-looks hot-dot chasing of real-but-non-US companies, rather than of this week’s pump-and-dump scheme.

    I fully admit I have no data ata ll on this. Does anyone?

  25. BuyOrSell commented on Apr 26

    Aumenta la volatilidad..

    Navegando por The Big Picture me he encontrado con este interesante gráfico. El dato principal es el volumen OTC (over the counter). Estos valores (OTC) son empresas que cotizan pero no cumplen las condiciones impuestas por los mercados para ser nego…

Posted Under