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Umm, excuse me, but I'm eating a bit of crow right now... ;-) Yes, after I posted my response I noticed your moniker. However, yours doens't qualify as obscene. Stop by the Yahoo boards and look at the monikers of some of the posters on the penny stock pages..... However, I do remain suitably chastised for my comment. Having said that, I do find discounting opinions of people who pick obscene monikers to be a useful technique for culling through large amounts of messages. After all, the statistical chances of someone who describes themselves in such a fashion to actually contribute something meaningful in a conversation is less than someone who has a more socially acceptable moniker.

Regarding your point as to the posting of lies-Yes, you are correct that would be illegal. However, much of the postings from those whom I think may be paid pumpers and bashers are more of a "rah-rah" variety, with some unverifiable factoids thrown in for credibility. Not really lying, but more of an attempt to get people to make emotional decisions. Your point that most would completely discount such posts. I agree, intelligent investors would. However, in thinly trades stocks, just a little trading action is enough to move the volume. Likewise, in a stock that have been beaten down, the emotional state of some investors is that they may seize on anything to justify a decision to get out. Finally, although the level of benefit in terms of dollars traded per pump/basher message written may be low, the cost of such messages is also low. All it takes is one guy with an internet computer. It's kind of like the "Nigerian Bank Scam." Yeah, only 1:10000 people may reply to the scammers offer to give them $1 million to borrow there bank account to move money from Nigeria. But the cost of sending those emails is very low, and the payoff is fairly good for the one pigeon you get.

IRT your comment on Naked Shorting. Investopedia describes Naked Shorting as "The illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. However, some professional investors and hedge funds take advantage of loopholes in the rules to sell shares without making any attempt to borrow the stock."

Steven E. Lohr
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