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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: Vendit™ who wrote (3366)	1/2/2005 4:37:31 PM
From: rrufff	Read Replies (2) \| Respond to of 8752

Reid, Actually, the risk is different not necessarily "more." OTC BB stocks need to fully report. Pink Sheet stocks do not report and are really nothing more than gambling. Granted that one can lie and mislead in a filing, but someone who follows OTC BB stocks has at least something upon which to base his decisions. If one doesn't like the filings, one should avoid that particular OTC BB company. Many people don't realize there is a difference between OTC BB companies and Pink Sheet quoted ones. With a lifetime of investing, I've actually come across my best (admittedly speculative) approach the past 3 plus years. It involves a very diversified approach to micros, a mathematical diversification, all of which is in a universe of extensive due diligence. I find CEO's more approachable than I would in larger companies. I am able to use my investigative and cross-examination training from the real world to get information that I could never hope to get from S&P 500 companies. My approach has been tested in bad markets, including 9/11 and the late stages of the internet bubble bursting. Although my education continues to this day, I believe I am better equipped today to see through the BS because of the internet and this is magnified when evaluating relatively simple businesses in the Nasdaq and OTC BB world. I've come to the belief that the US system, perhaps the best in the world, is still rife with manipulation from top to bottom. Management of all size companies generally have one thing in common, that is large payment packages, options, "extras", tax deductible limos, etc. Promoters of small caps wear a slightly different hat from analysts and corporate bankers that represent big companies, but the incentive to get people to buy sometimes leads to massive fraud. These are not small cap names - Enron, XOXO, MCLD, MCI, Global, Montanna Power, etc. Fraud is everywhere and available for the taking by those who take advantage of the uninformed, or who can outstep our regulators and administrators, who often protect us with the frequently "just good enough" mentality of government. Look at how many brilliant analysts where fooled by these companies. Most of the crooks can't even be called "crooks," either because what they did was not criminal or just can't be proved. Where was the SEC and our other protectors? Don't you laugh when you see Roth from NT walk away with 100's of millions of dollars while the stock goes down 90%+++? Sometimes a big victory is 6 months in jail and giving back of a small percentage of actual theft. I haven't even approached discussing the incompetents in management who get huge severance payments after a stock tanks. Look at the Disney fiasco. Look at what's going on with Fannie Mae now. I've also come to understand that there is no substitute for hard work. Although I may luck into a multi bagger in a day as I did the other day with DPAC, I never really know which stock will move or when. The spreads, the lack of trading, the momo crowd, require patience and lots of due diligence. Yet, to me, this risk is more quantifiable and I feel more in control, than I do trusting my speculative money to someone who makes $10 million a year, irrespective of how well the stock does. One of the things I'm hoping the internet and chat boards develop is more effectively directed shareholder activism. Until investors start to complain, organize and speak up, those who will take advantage, legally and illegally, will continue to do so. Analysts that are pressured to give a "buy" rating at ML and managements that get 7 figures while a stock falls is as repulsive to me as a tout in a micro cap who spams for $25,000. I am of the opinion that all OTCBB companies are greater risks vs. reward plays then a company that is listed on the NYSE simply because of the reporting requirements.