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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Archie Meeties who wrote (180541)7/16/2002 10:54:59 PM
From: Earlie  Read Replies (2) of 436258
 
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Junior companies become disowned orphans as a market folds. Funds concentrate their remaining dough in an ever shrinking pool of untarnished "liquid" stocks. Effectively, it is this concentrating of financial fire power that keeps the senior indexes looking reasonable (and of course thus keeps the sheep happy). The last stage is the "musical chairs" part of the game when all those fund managers have to decide which victim the market will chose to dismember next and try to unload the day before (and few are expert at this game).

Junior companies are already experiencing a very difficult time raising capital, consequently many of them, including some of the brightest and the best, will not make it through the coming storm season (been there and done that back in 1987). Balance sheet diseases in particular (especially low cash reserves) take a high toll once liquidity becomes an important word in our vocabs. Due diligence looms ever more important.

Best, Earlie
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