FYI | Apr 08 2006
We picked this one up from the weekend AFR. Celebrity lawyer and "avid [share] market trader" Chris Murphy shared a few of his words of wisdom in a story about chatrooms having become increasingly popular in a bull market that appears to be focused on the mining end of town (a theme put forward months ago by this journalist as an explanation of why biotechs are having the hardest time of their lives).
Murphy uses technical analysis and watches trading volumes closely. His basic rules are: Up on volume, bullish; down on volume, bearish; up on thin volume, bearish; and down on thin volume, bullish.
Interestingly, Murphy also revealed he has been making quite some money recently out of "shorting" (selling) Telstra (TLS) shares, and then buying them back afterwards. His technique, if we can call it like that, seems as straightforward as any trading trick can be: "I have worked out that the retailers rush in in the morning and institutions sell in the afternoon". This should provide everyone with the answer about when he goes short and when he decides to buy back some shares.
Looking at another front page story, by the Sydney Morning Herald, about how Telstra is forced to play the discount card to prevent its fixed line customers from switching to the competition, it would seem Murphy’s "secret" might be the only way of making money from the embattled telco these days.