5. Share ownership doesn;t work. Down markets expose things like Ponzi schemes (Madoff, etc) and illiquid securities (derivatives markets, hybrid securities, and yes, Common Stocks can be illiquid).

Some key issues here (figures rounded broadly):

a) 11.5m common shares.
6.2m owned by top 3 owners
1.7m owned by insititutions (58 www.nasdaq.com)
___ owned by employee pension plan
___ owned by employees 401k plans
---------
maybe 2-2.5m in real float, but who is trading?


b) 2,500 shareholders and trading. 2,500 share holders suggests more trading activity. Take a closer look.

- 10 of the 58 Institutions own 358 shares or less
- top 3 owner family + employees own 75% or more
- who/where are these 2,500 - 3 - 58 = 2,439 other shareholders ??


c) example of inflated(artificial) and inefficent pricing... Bruker Daltronics (BDAL then changed to BRKR, almost all owned by family before IPO)

- IPO $10 range (2m shares offered in IPO out of total of 20m, ie just 10% let floated)
- stock rises to $25 because of limited supply float (is the company somehow worth an extra $300m? = $15 increase over IPO x 20m shares)
- investors realize profits (and yes, Bruker had prodits not losses) per share not tracking $25 price. Price drops to 15 area.
- family sells another few million shares at $15-16
- today BRKR trades at $3.58


KCLI headed in same direction. I would say I would buy their shares at $1.00, but value continues to erode.

a) Old American block looks to produce losses in future. Oh, life insurance is stable, always profitable... NOT !

b) do they know how to manage assets in this environment?

c) Sales were down even more significantly when you consider that the Immediate Annuities' single ie One-time premiums are just that, one-time

d) do they know how to manage assets on these annuities? rates will rise (ie bonds will fall) and if bonds are sold, likely to be capital losses.

e) as another poster mentioned, shares were given by rich family. Well, for a $285m market cap company, those $1.2million and 500k salaries are ridiculous. Many larger cap companies have salaries much much much lower.

And especially in these economic times where companies have introduced salary freezes and reductions.

And, the total annual dividend is approx $10m, but cripes add up the salaries of the top 5 listed employees and it's over $3m ... the dividend is miniscule and the salaries way too high!