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Microcap & Penny Stocks : ADGI - American Diversified Group -- Ignore unavailable to you. Want to Upgrade?

To: TopCat who wrote (5996)	3/27/1998 8:37:00 AM
From: MeDroogies	Respond to of 9569

Actually, "let the buyer beware" IS NOT a premise of the capitalist system. The basic premise of the capitalist system is to disseminate and distribute ENOUGH information that people can make informed decisions. That companies and people DON'T do that from time to time is one of the only reasons I support governmental involvement in markets. If "let the buyer beware" was a basic premise, then insiders would spread misinformation, jack up the price and then dump stock. Similarly, while I understand and support the role of MM's, the fact that some engage in illegal or otherwise distasteful activity leads me to believe that many penny stocks are rigged. However, I KNOW that could be the case, and is factored into my decision making process. Many people DO NOT know that and confuse themselves into believing that their first foray into stocks should be the pennies BECAUSE they can own 10,000 shares of some shell company at .05, as opposed to 100 shares of an established firm at $5. Chances are, they will have more to gain and less to lose with the established firm. The lack of GOOD information is precisely what makes BB stocks such a gamble and stocks on the established exchanges considerably more valuable. Still, I agree with the basic premise in regard to the MM's. If a stock has intrinsic value, they can shake it all they want. Eventually, they will lose their shirts. If a stock is worthless, then pumping and dumping and engaging in shakeouts from time to time will enrich them.