THE 3 REASONS WHY INVESTING IN MICRO-CAP STOCKS BEARS THE MOST FRUIT, WITH THE LEAST AMOUNT OF WORRY
Not just any micro-cap stock, of course. You can't just go around throwing darts at companies with market caps under $50 million and expect to pull in 500%.
What you want to do is target the most overlooked, the most misunderstood and the most complicated situations of all.
Here are the reasons why:
1. Institutions are ABSENT. This is so important. The sharks aren't swimming in this part of the ocean. This causes trading conditions in these stocks to be a lot more transparent than your average stock that is being pulled every which way by thousands of different Wall Street pros.
2. Restructurings in this sector of the market are abandoned and ignored. Why? Individual investors don't care to understand them. They see the words bankruptcy, debt restructuring, activist, spinoff, renegotiation...and they either shut down completely and ignore the stock or they sell the stock and go away forever.
3. I've said it before...I'll keep saying it. These companies are like option contracts without the time decay. I don't have to be right over a window of 6 months, while the time value of my option contract slowly erodes. I know that if I do my research and find that stock that has potential, I can sit on it for as long as I want, and 9 times out of 10 it will bear fruit if I've done my research correctly. And the fruit these names bear are not of the 50% or even 100% variety. Option contracts without the time decay.
It's not rocket science. I'm not looking to feed my ego in the markets by taking on every hedge fund manager in the game on a daily basis, attempting to prove I'm smarter than everyone else. I want the least stressful way to make the most amount of money.
I've got a tiger by the tail and I ain't lettin' go.
