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To: Archie Meeties who wrote (180546)	7/16/2002 11:21:46 PM
From: At_The_Ask	Respond to of 436258

What Earlie said about ability to get financing is the key thing to keep in mind about small and mid caps. A glance at a russell 2k chart will indicate that many others are aware of this effect. Also remember that until 2 months ago the small caps were the "place to be" because they hadn't sold off like the other indexes during the correction. They have just begun to corect as j6p has been steered into them for the last year or so.

To: Archie Meeties who wrote (180546)	7/17/2002 6:27:28 AM
From: Earlie	Read Replies (1) \| Respond to of 436258

Arch: I guess each of us has to make up his/her mind as to when the bottom is in. With respect to the juniors, I remember that even after Greenspan rescued the markets back in 1987, it was a couple of YEARS before the tech juniors experienced a lift. The big stocks were the last to take the hit and the first to start to catch a bid. I owned a nifty bunch of tech juniors through the piece. Many just shrivelled up and died for lack of financing and most of the remainder represented "dead money" for many moons. The juniors have been on rations primarily since the dot.com blow-up. The good ones have been able to raise dough right up until just the last few months. Even now, I see the occasional financing completed, but the guys involved really have had to beat the bushes to complete them. To me, it is just one more classic sign of a deteriorating market. From my perspective, the bottom will be easily recognized by the many junior corpses strewn along the path. IMHO, we have a ways to go yet. That is not to say that carefully chosen juniors should not be bought. Indeed a few of them may do very well during the coming deflation-driven period. At this end, I screen any that are of interest by asking myself, "Who will the company sell to in a low liquidity environment (i.e., specifically who will want to shell out precious dollars for the company's product or services when cash is being conserved)? As cash dries up, a remarkable number of things come to be viewed as "non-affordable luxuries". Disregarding PEs has worked during the past manic bull maket, but history suggests that PEs fall to truly breath-taking levels in debt-driven cycles. What we are just entering IMHO is not an inventory driven (short term) cycle, but a debt cleansing (long term) catharsis. The proof of this for me is the total lack of economic response in spite of a historic lowering of interest rates. Best, Earlie