Friday, July 01, 2005

 

Sue's sweet spot for penny stocks...

In the movie Boiler Room, fictional young stockbrokers try to hook gullible investors into buying worthless stocks in companies they've never heard of. Meanwhile, in Congress, Sue is leading the charge to give many of these non-fictional microcap companies easier access to capital markets. Sue sponsored this legislation that tries to loosen up some of the rules put in place under the 65 year-old Investment Company Act. Sue's bill, which passed two months ago, was sent to the Senate.

First, a disclaimer: there are many good microcap companies out there that make perfectly legitimate investments. But given their limited trading volume and how easy it is for 1 or 2 investors to manipulate the price, they're not exactly a stable investment, say something you'd want to bet your Social Security dollars on.

But those concerns don't appear to figure into Sue's calculations. Yesterday, the main PAC/lobbying group for microcap stocks mentioned its special relationship with Sue in this press release, noting that Sue has spoken at their annual leadership conferences along with ├╝ber-Conservatives (and former Congressmen) Jack Kemp and J.C.Watts.

Is this really the type of company that constituents in the 19th want Sue to be keeping?

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