What are Liquid Securities?

The vast majority of the securities that various groups buy are supposed to be traded on an organized stock exchange or an established over-the-counter market and are considered "liquid" securities. Occasionally, they may buy a private placement of stock that is not immediately marketable, shares of a public company that are temporarily restricted from open market trading, or shares that are so inactively traded that there is no publicly available market price that can be used to value the security position on a day-to-day basis. In these cases, a special pricing committee determines a price that is used to value the securities for purposes of calculating net asset value of the fund each day.
Is this a good bet? What precautions should be taken?

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