Sefton Resources thread for all ADVFN users

I enjoy reading this thread, so many wonderful characters.

On every thread you will find people who believe one day their AIM listed share will one day make them rich. History shows us that only a very small amount of penny share companies make people life changing amounts of money. When small caps do rise the majority of investors sell out for small gains.

If you look at the charts for most Small Cap companies you will see an average of 2 spikes per year. This is where most PI's get sucked in, thus leaving them to sit and wait out for the next spike where they can bail out.

There are of course plenty of quiet times for the investors in these companies, this is when tempers rise and personal abuse rife, I guess this is only natural.

Be weary of people who appear to know more than the average PI, no PLC will willingly allow information to be passed outside a company, the punishments are too severe. This is not saying snippets of information do not leak, generally this is a ploy by the management in an attempt to keep PI's happy. This practice is generally used by managements who are not producing the goods.

Regarding the true facts of a company, well there is generally enough information in the public domain to show you if a small cap is worthy of investment of in fact shorting.

1. How long has the current management been in place?
2. How well did they perform in their previous jobs?
3. How much cash has been available to the management over the past 5 years, from this amount how much has been turned into profit or how much has been wasted?
4. Is the company attracting new directors or institutional investors?
5. If the company is not in a closed period and the share price is considered by many to be at a low level, are the directors buying shares?

These are just a few of the many questions you should be asking yourself, before you invest.

I do not hold shares here, although I have shorted the company a few times in the past 24 months, 3 times I made a considerable amount of money, once I lost a large sum.

Be warned all posters on a bulletin board have their own agenda, and rightly so. I take all information posted by PI's with a pinch of salt, I like to rely on my own research.

Best wishes to you and your families over the holidays.

S