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To: James Strauss who wrote (2111)	7/2/1998 12:21:00 PM
From: James Strauss	Read Replies (2) \| Respond to of 13094

Beware Of Shorts In Sheep's Clothing... ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ IMPORTANT READ FOR ALL LONG" INVESTORS ON SI: I wanted to ask you all something fundamentally important to ALL of us. It is pretty obvious that Market Makers are trashing good stocks and bad lately. It is brutal...I am sure you have noticed. Microcap 50 index is down 6 weeks in a row... some 14% LOOK HERE... a must read on MM Shorting tactics. It uses ALYA as an example but note how the MM's pump up to get maximum ASK PRICES when good news comes out, and drop the BID PRICE when things die down to panic investors into selling and picking up cheap shares to cover. They can make 20% or more each day by doing this on large amounts of shares. (please click on the link below and see the excellent post) NOTE: this is not only on really quality stocks like ALYA but hundreds of others every day; in fact it is much worse on most other stocks because long term investors are in ALYA who buy dips exchange2000.com ANOTHER MM TACTIC: Also, on most stocks, they are slowly walking down the Bid on small sells and in some cases "walking down the bid" on buying! They apparently feel that they can go short and get the share price down eventually to cover. This happened on MTEI recently with 3 to 1 buys over sells. On SGNC they held the B/A firm even with massive blocks of buying and good news, and then moved the Bid/Ask down 20% when things slowed down. It has stayed there and not recovered. ****** READ ON... THE BIG NEWS...massive scandal? I have been playing detective, forming alliances with others I trust with connections, and have even been interviewed by a reporter for the Wall St. Journal (along with others in DGIV) doing a story on BB stocks, MM manipulation, and PR firms that are even shorting companies they are representing! A MAJOR SCANDAL BREWING? Others whom I trust have stated that MM's are being paid by US Brokerage houses and big boys to work through Canadian Brokerage houses to short stocks, as shorting BB stocks is apparently allowed from Canada of US BB stocks. (NOTE: in the US, shorting is not allowed in non-marginable stocks under $5.00) YET ANOTHER MM TACTIC..."the STOCK DETECTIVE" MM's are lurking on most SI and YAHOO threads and looking for a ripe moment to hire shady firms like the "STOCK DETECTIVE" to discredit even some pretty decent stocks like DGIV, NUKE, and DCHT. See "STOCK DETECTIVE exposed below: SEE HERE...a MUST READ, especially the last 3/4 of the article referring to the shady workings of the Stock Detective, who itself is connected to AXESSS, a pink sheet stock of very dubious history. exchange2000.com PLAN OF ACTION: Just curious if you think there is any hope here? And an effective course of action. I suggest we all call our local SEC officials and implore them to look into this problem more seriously. I know they are overworked, and I know new regulations are coming in a few months (i.e all listed companies must be fully reporting) but we are being taken to the cleaners....NOW! I have already started calling SEC officials and my contact at the Wall St Journal...we must all do that, IMO. Of course finding great stocks, laying low, and holding long term is the best strategy, but seemingly hard to organize people to do that. ****************************************************************** PROTECTING YOUR INVESTMENT ----------------------------------------------- Understanding Undeclared Short Selling and How It May Be Impacting Your Company's Stock. Does it sometimes seem that no matter what you do your stock has trouble climbing in price? If this is the case, your company's stock may be facing downward pressure as a result of undeclared short selling. Short selling can be divided into two categories, declared and undeclared. Undeclared short selling has damaged many dynamic growth companies. Created by market professionals, the practice consists of creating and selling stock that doesn't actually exist. It isn't borrowed but created and it creates enormous negative pressure on a stock price. The mechanics of undeclared short selling are as follows: Nonexistent stock is sold short. This nonexistent stock increases a company's float. The nonexistent stock makes it difficult for investors to profit from their risk capital speculations. The short sellers make the profit. The practice hurts the public companies, themselves. It adds massive costs to maintaining a market in a stock and it reduces a company's business options. The basis of declared short selling is borrowed stock. A short seller provides 50% or more of the value of the stock to his or her broker. This is done in a margin account. The margin protects the broker against any increase in the share price. The broker borrows the stock from a depository trust company. He then sells the stock and adds the money to his client's margin account. Later, the client buys stock (covers) to replace this borrowed stock. The difference between the price the client sold the borrowed stock and the price the client paid to replace the borrowed stock (covered) is the profit or loss from the transaction. Most declared short players are institutional money managers and fringe group market professionals, not small capital public investors who seldom participate. Declared short positions risk being squeezed. If the company can double its share price, the seller will be forced to increase his margin collateral in order to maintain the short position. At such time, the short seller may elect to buy (cover) the stock instead of adding to his margin. This adds to the upward movement of the share price. Undeclared short sellers don't borrow stock. They don't margin the sale of their short position. Because they are market insiders (makers) they can use various techniques to sell stock short that doesn't exist. Is there money to be made by undeclared short sellers? Estimates are that undeclared short sellers make multi-millions of dollars annually. Complaints to regulatory agencies haven't stopped the practice of undeclared short selling. However, one way companies can protect themselves is to recommend to shareholders that they take physical delivery of their stock certificates. When physical delivery of stock certificates is demanded by a significant number of shareholders, the creators of non-existent stock can be squeezed. The short sellers won't have stock certificates to deliver and thus they will be forced to go into the open market to buy the stock. This will cause losses for them and will cause them to move their undeclared short activities elsewhere. For other ideas on battling professional short sellers, contact Ray Bary at the financial public relations firm of Copley- Pacific at (214) 702-7009. And the SHORTIES try to come across so sincere, the little stealers turn my stomach and probably cheat at cards to make some pennies. Jim