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X-Fortune 500

10/29/07 10:20 PM

#16124 RE: juanly #16123

I Know I know....
I am an Old Codger too..

They make about a million in a day or two and smile big.
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Uncle Meatball

10/29/07 10:33 PM

#16125 RE: juanly #16123

juanly, great question!

The only rule you need to know about MMs is this:

MM Golden Rule: MMs will NEVER EVER, EVER lose money in a stock. Do some DD and find out the last time a MM went bankrupt because a stock jumped from .0003 to two dollars in a day. It doesn't happen like that.

In your scenario it really is no big deal and here is why:

Perihelion comes out with PR that they are not only mining gold but they have also found platinum in their mine. So far the company has pulled out 17 kg of platinum in three months of operations.

The MMs say, "ok, here we go" and start gapping up the stock quickly. Now the flood of momos (momentum Movers (term may be out of date) as I recently started farting around with stocks again) jump into the stock and are now buying shares at like .05 instead of .0005 where the MMs PURCHASED the stock. The MMs just made what, 2000% on their money?

Now the stock continues to climb and people here are like, "HOLY crap the stock is at .20 a share and I averaged down to .04 a share, TIME TO SELL for a FIVE BAGGER!" You are happy cause you just caught a 5 bagger when you thought you were stuck and the MMs just picked up cheap shares because they gap up again.

The thing to take from this is that the market makers will always make money in any market, bear or bull. If Perihelion goes dormant they will just keep the stock low and let us trade shares between each other and they will make money on other stocks, I hope this answers your question.

Respectfully,

Uncle Meatball


Now the stock is at .40 ask and .37 bid. Repeat the cycle