A good small cap is often a young company experiencing fast growth, since its rate of growth on a percentage basis will almost always be faster than when it becomes a more mature company. But some gems are hidden among older companies whose shares fell out of favour when the company ran into trouble, but the company is now experiencing a comeback.
A good small cap is often a young company experiencing fast growth, since its rate of growth on a percentage basis will almost always be faster than when it becomes a more mature company. But some gems are hidden among older companies whose shares fell out of favour when the company ran into trouble, but the company is now experiencing a comeback.
IAN WYATT is the founder and President of Business Financial Publishing and the Chief Investment Strategist of SmallCapInvestor.com. He is the driving force behind the growth of Business Financial Publishing, recognized by Inc. magazine in 2008 as the 185th fastest growing private company in the United States. Wyatt also plays an active role in the investment research activities of the company, and as a well-regarded small-cap stock expert, he currently leads his company's premier small-cap stock investing service, SmallCapInvestor.com PRO. He has been interviewed or cited in numerous well-known publications, including Marketwatch.com, Kiplinger's Personal Finance magazine, Barron's, Forbes.com, and the Dick Davis Digest, among others. For more insights into small-cap investing, visit www.smallcapinvestor.com and www.ianwyatt.com.
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Acknowledgments.
INTRODUCTION The Story of a Small-Cap Investor.
CHAPTER 1 Start Small, Finish Big--Discover BigProfits in Small-Cap Stocks.
Small-Cap Investor: Eight-Step Process for Big Profits fromSmall Stocks.
Small Caps as Generators of Growth.
An Example of Small-Cap Success.
Small-Cap Value Stocks Outperform Large-Cap Growth Stocks.
Profitable Small Caps Don't Always Make Gains on DayOne.
The Inefficient Market Theory: The Small-Cap Advantage.
The Market as an Emotional Being.
CHAPTER 2 Big Ideas for Big Profits.
Spotting the Next Big Idea.
Expanding Your Search.
The Competitive Edge.
Spotting Institutional Activity.
CHAPTER 3 Finding Great Small-Cap Stocks.
Growth + Value = Profits.
Success Stories from the Past.
IPOs Are the Genesis of Small Caps.
Spotting Growth Sector Trends.
News You Can Use.
You've Found an Interesting Trend or Company--NowWhat?
CHAPTER 4 Understanding and Evaluating FinancialStatements.
Generally Accepted Accounting Principles and the Basics ofAccrual Accounting.
Financial Statements Made Simple.
Ten Key Metrics to Review in Every Financial Statement.
What Exactly Are Earnings?
A Quality Test: Cash Flow Instead of Earnings.
Ten Accounting Red Flags.
CHAPTER 5 Financial Projections and Valuations.
Understanding Financial Guidance.
A Reality Check.
Guidance Caveats.
Interpreting Analyst Estimates.
Companies Play the Earnings Game.
Financial Trends for Spotting Promising Small Caps.
CHAPTER 6 Taking the Mystery Out of Technical Analysisand Trading for Quick Profits.
Some Technical Basics.
Accumulation and Distribution.
The Relative Price of a Stock.
CHAPTER 7 Trading Strategies for Successfully Buying andSelling Small-Cap Stocks.
Liquidity Considerations with Small-Cap Investing.
Risk Tolerance.
Risk Awareness, an Essential Attribute.
Timing Decisions.
Trading Techniques.
CHAPTER 8 Portfolio Diversification and Allocation.
Equity Diversification Methods.
Diversification Mistakes.
Overdiversification.
Using Mutual Funds and ETFs to Diversify.
Risk Tolerance as a Means for Diversifying Your Portfolio.
