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Gold/Mining/Energy : Pacific Rim Mining V.PFG -- Ignore unavailable to you. Want to Upgrade?

To: Ross Mickey who wrote (9186)	3/19/1998 4:02:00 PM
From: Quickdraw	Read Replies (1) \| Respond to of 14627

Ross: Just noticed this document was posted at SI regarding MMs forbes.com Strictly speaking it deals with Nasdaq stocks but I wonder if some of the info. regarding Institutional trades and Insider sales applies to the TSEs trading rules. In particular this paragraph strikes me as interesting. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Under the cover of this dealer-to-dealer trading, all kinds of games are played. For example, insiders can unload restricted stocks under conditions set up by the sec. Rules say that, per quarter, insiders cannot sell more than 1% of the shares outstanding or more than the average weekly reported volume in the stock for the previous four weeks. The more volume in the stock, the more stock you can sell. If volume were counted as it is on other exchanges, executives of Nasdaq companies could sell less than half the insider stock they can sell today. This is a powerful incentive for stocks to remain on Nasdaq long after they have achieved sufficient seasoning to move to the Big Board. Dealer-to-dealer trading also provides splendid opportunities for creating attention-getting volume that will show up on computers and attract momentum investors. Nasdaq admits to as much in marketing materials it uses to recruit companies. Nasdaq's "increased demand creates a higher price" for your stock, according to the sales pitch. The Nasdaq sales kit goes on to say that Nasdaq marketmakers "actively find buyers and sellers to increase demand" for your stock. They also "make potential investors more aware of your stock through research." Why? With their fat spreads and their ability to get in between buyer and seller, Nasdaq marketmakers can profit greatly by moving every share they can. Nasdaq boasts that "over the past 20 years the Nasdaq index has outperformed the NYSE, S&P and Dow Jones." True, but this performance measure does not take into account the higher costs of trading on Nasdaq. Those costs can diminish returns pretty darn fast. Rick