When the market started to crap the bed last year, hundreds of public companies were faced with the prospect of delisting due to their low share prices and market caps.

Because of the unusual nature of the circumstances -- and the fact that they had much bigger problems to devote resources to -- the NYSE and Nasdaq elected not to enforce minimum share price requirements temporarily. But now that the market has rallied, what about companies that haven't been able to get their share prices back up a bit?

While stocks listed on the over-the-counter bulletin board (OTCBB) and the Pink Sheets, a privately held daily quote service (not a stock exchange), are known to be lacking in SEC filings, liquidity, and easily obtainable financial information (some have been delisted from major exchanges so brokerages actually make customers sign additional forms recognizing the added risk if they choose to trade in this niche), they actually are fully audited. In the last few years, Pink OTC Markets Inc., which owns these quotation systems, has aimed to bring extended transparency to this little known niche through the introduction of OTCQX.

The OTCQX, now a few years old and with 55 stocks listed, is a premium area of Pink Sheets -- which is littered with over 9,000 companies, most of which are penny stocks that don't trade very many shares or very often -- that provides a new level of disclosure not required outside of any major stock exchange, such as the AMEX, NYSE, or NASDAQ.

It used to be that you could avoid ads for fraudulent stock promotions if you didn't open up spam emails and managed to stay off the lists of boiler room cold-callers and mail houses. But now these thugs are taking out ads in top newspapers, according to The New York Times (permalink).

Such venerable publications as The New York Times and USA Today (by venerable I meant The Times) are featuring full-page ads touting "emerging growth" companies. If you want to know what that is, take a look at the insightfully sardonic Penny Stock Player's Dictionary:

Emerging Growth Company -- an implausible story about a hypothetical business.

Emerging Growth Stock -- a scam.

While the takeover battle between the NASDAQ and the London Stock Exchange rages on, the lesser-known American Stock Exchange (AMEX) has hired Morgan Stanley to begin the process of demutualization, presumably setting the stage for an initial public offering (IPO). The IPO comes after numerous exchanges/trading companies have gone public in recent years including the Chicago Mercantile Exchange, New York Stock Exchange and, regrettably, Refco.

The AMEX is definitely the least-respected of the major exchanges. I once mentioned a company to an older stock broker friend and asked him what he thought of the company. The first thing he said was "Ah! The AMEX! That's where bad stocks go to die." The AMEX will also continue to face competition for listing from the OTC market and even the Pink Sheets, where it is taking steps toward greater transparency and scrutiny of companies, perhaps setting the stage for a better reputation. The Pink Sheets is widely known as a great place to find penny stock pump and dumps.

In addition, the high costs of Sarbanes-Oxley will, in my opinion, lead more companies to seek private funding, leading to fewer IPO's in the future. The AMEX may do great, but it's not an IPO I'll be buying into.

Over the counter (OTC) stocks interest me but the pink sheets appear to be too risky. What is it I find most intriguing about OTC stocks? They allow a person with more nerve than money to break into the stock market game. Pink sheets and penny stocks are historically the most risk prone investment vehicles. They're kind of like a trip to the casino. Going in there requires the investor to be prepared for the real possibility of leaving some money behind. OTC stocks on the other hand, provide a noticeably bit more security and some are actually stocks from very solid companies that are just unable to meet the price and volume requirements of the large stock exchanges.

The OTC Bulletin Board is the place to find out what OTC stocks are available. There are surprises on the OTC with some business names we all recognize. Others, I've never heard of. There's one thing for sure, it's a lively place where there is money to be made. If someone is entering the sport of stock trading, the OTC BB can be an excellent place to get started in my opinion.

OTC stocks require some special investment knowledge. Knowledge not in the sense of special analytical skills, but in the sense of having the desire to pick some winners and the patience to do some foot work. Making prudent investments in OTC companies, requires learning about them. There must be willingness to do some research about potential prospects. The more research done, the higher quality the knowledge will be. The trick to the sport is to find the companies that are ready to go upward. If the timing is right, then the possibility of actually making some dollars exists.

I'll be writing more about getting started with stock trading. Taking things easy may be my best bet. It's been an awfully long fourth quarter this year but let's just hang in there.