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Thinking about small caps

                                     Important facts to keep in mind…it is so important!

When your research and your own analysis clearly indicate that a company’s stock is undervalued and overlooked we advise friends not to share that information and the company’s name with anyone.  

  The reason? There is very limited liquidity to outright poor liquidity in the markets today. The ability to buy and sell in any size is limited. The fact is that the buying and selling volume often limits the total number of shares available to buy and sell.

And investors must be willing to “dollar cost average.” That requires that if an investor(s) owns a company and the fundamentals are still positive, on severe price declines (or during a bear market) the investor(s) is willing to buy more shares at the lower prices.

Half of our low cap stock picks can fail and have in the past…….but as we have seen, the investing at “throw-away” bottoms has worked quite well. Our “copains” (friends) in Montreal have advised  to speak to no one about our choices. So we keep our “picks” to and for ourselves. We do not want “company” whether either investing or selling.

When your research and your own analysis clearly indicate that a company’s stock is undervalued and overlooked we advise friends not to share that information and the company’s name with anyone. The reason? There is very limited liquidity to poor liquidity in the markets today. The ability to buy and sell in any volume is limited. The fact is that the buying and selling volume often limits the number of shares available to buy and sell.  

And investors must be willing to “dollar cost average.” Again that suggests that if an investor owns a company and the fundamentals are good, on price declines (or during a bear market) the investors are willing to buy more shares at the lower prices.

Half of our low cap picks can fail…….but as we have seen, the investing at “throw-away” bottoms has worked quite well. Many have risen ten to twenty times our original investment.