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March 1, 2007, 02:00 AM

Thanks for adding some more.

My rule applies whether I think it is a Sound investment, or the investor thinks it is a sound investment.

Let me explain...

The moment you co-sign or Guarantee a loan, YOU are where the buck stops. YOU have the most to lose. The person who you went guarantor for has a lot to gain and nothing to lose. YOU, as guarantor, are the one with Skin in the deal. The Lacky - for lack of a better word - has no skin in the deal. If the deal turns sour - and you must assume it will - the lacky walks and leaves the guarantor holding the bag.

Hence, it is Unwise to guarantee Someone else's loan or deal. Shouldering the burden whilst not having control of the deal or how the money is applied.

What is Foolish is... guaranteeing someone else's performance and shouldering all the financial burden while having no control.

Michael Ross

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