Conventional wisdom dictates that the early stages of a corporations growth cycle offer substantially more compelling risk-reward profiles than advanced stage investments. But that is exactly where the reality of that proposition ends. In actual fact, the Medium and Small Capital matrix has accumulated so many unsustainable business models over the previous decade that major brokerage houses have little or no problem in persuading hundreds of thousands of investors, both institutional and retail, to keep their money in companies with a proven past.
The junior markets are plagued by a number of fundamental issues. At one end of the junior spectrum, e.g. the Pink Sheet marketplace, corporate disclosure is so limited that a stock purchase is akin to gambling in a casino. Moving to a slightly higher level, the OTC Bulletin Board system continues to struggle between demanding greater public information on one hand and increasing the sheer numbers of listed counters on the other. The OTC Bulletin Board does require companies to report accounts and material developments on an ongoing basis but as many investors have found out to their cost, regular filings do not necessarily...