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goldminingXpert (28.62) What's Wrong With The CAPS Community?



December 01, 2008 – Comments (9) | RELATED TICKERS: ANVGQ

Brittannia Bulk Shippers have suffered a severe decline this year, losing 99.96% of their value, as the stock fell from well north of $10 to 0.01 most recently. However, the CAPS community was overwhelming bullish on this stock... it still, even at 1 cent, maintains a 5 star rating. What a hidden gem indeed! There are still 85 outperforms including 8 all-stars on this thing--and not a single bear. While it makes sense that a bear would have cashed the points and left, the stock only accumulated 11 total red thumb picks in its entire sordid history (there are still 85 active green and a bunch of closed green thumbs to boot). The CAPS rating was 5 stars the whole way down the slope to 0.01. Unlike DRYS, which the CAPS community understood to be a bizarre hopeless bubble, this sinking stock failed to garner even a mild amount of skepticism from the CAPS community.

Disclosure: GMX never rated BBLKF.PK and thus is not a hero nor a villian in the Brittannia 5-star rating debacle. 

It should be noted that some of the people playing this were clearly just in it for the adventure, CAPS finest penny stock gambler Bravobevo (who gambles on penny stocks to tout Jesus--odd combo; vile penny stocks for God!--but that's another topic for another day) ate it (and deservedly so) on this junk. But real 99+ rated all stars such as redfox18 and patelk10 fell for the Brittannia scam. I'm a bit concerned for CAPS when we give and maintain 5 star ratings on stocks that fall from double digits to a single penny within months--we may have a bit of soul-searching to do to see how we allow such trash to maintain our coveted stars. (While this stock is particularly gruesome, it is embarrasing how many complete piece of trash mining and oil companies that have prospects on paper only continue to have a lot of stars. Even with my faithful CAPS stalkers WilyInvestor, Semper77 and Sheepinvstr213 redthumbing Allied Nevada Gold, we only have it down to two stars (from a patently absurd 4 stars). ANV has about as good a chance of hitting it big in gold mining as I have getting a job as a rock star (I have a face for radio and a voice for magazines.) The fact that junk like and ANV are not universally red-thumbed show a disturbing lack of intelligence within the (hopefully) sophisticated CAPS community.

9 Comments – Post Your Own

#1) On December 01, 2008 at 4:11 AM, DaretothREdux (48.19) wrote:

Perhaps no one was able to red thumb it after it dropped below $1.50. Granted you are probably right, the caps community should have nailed it before that.

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#2) On December 01, 2008 at 11:15 AM, capsoregime (55.27) wrote:

Pile-on effect.  When certain CAPS members make a rating, a bunch of others follow along blindly.  You'll see it on other stocks going the other direction as well.


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#3) On December 01, 2008 at 12:46 PM, FoolishChemist (92.14) wrote:

Well I just looked and it is up 100% today!  Hidden Gem!

This is a problem when a stock drops below the CAPS threshold.   Look at the screener and you'll find 355 stocks below $150 million market cap with a 5 star rating.  Also 84 stocks below $1.50 with a 5 star rating.  Could be a few gems in there but more likely than not, those who did red thumb it jumped out and took their points and really the green thumbs have no where to go but up and it skews the rating.

This is why people need to use common sense and not be totally reliant on the computer.

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#4) On December 01, 2008 at 2:57 PM, Tastylunch (28.53) wrote:

It's because as I said before CAPS punishes people who close losing picks, it makes sense to leave a greenthumb open (where your losses aren't likley to run as high as a disastrous redthumb can) as long as possible in the hopes volatility can eventually get your points (and more importantly accuracy back) back.

It's a flaw in the scoring system.

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#5) On December 01, 2008 at 6:35 PM, semper77 (< 20) wrote:

I agree with Tastylunch. The scoring system that motivates the non-closure of losing picks is the biggest culprit.

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#6) On December 01, 2008 at 6:37 PM, goldminingXpert (28.62) wrote:

semper... what's up with the non-GMX inspired picks? (Though I must admit other than long KO, I like 'em.)

How'd you like ANV today? What a major piece of junk. I can't rant about it enough, companies like that make me want to throw tomatoes at my LCD monitor as I'm researching.

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#7) On December 01, 2008 at 7:55 PM, downwithpumpers (99.01) wrote:

Throught provoking blog. I question how accurate CAPS players were with DRYS.

 1. The scoreleader for DRYS chose outperform on it and earned over 501 points.

2. DRYS rose over 1000% trough to peak.

3. People predicted that bad/crooked management would cause a collapse in DRYS. DRYS didn't fall for that reason.

In fact DRYS rose consistently until the global economy fell into a recession. I don't remember any CAPS consensus that matched that reality.

 The management of BBLKF committed outright fraud and declared bankruptcy about four months after going public.

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#8) On December 02, 2008 at 6:41 PM, goldminingXpert (28.62) wrote:

interesting downwithpumpers. Hadn't put together the fraud connection. Very interesting to think about.

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#9) On May 06, 2009 at 11:33 AM, 97E3LPL (43.15) wrote:

The above posts appear informative, which leaves me perplexed about what the truths are considering this week's advance. I grabbed 1500 of these at 3 cents for the adventure, so naturally at the moment (900%) I'm smiling about the ride.  I can't find any news anywhere to explain this week's phenonemon.

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