Big Potential In Small Stocks!
SUPER SMALL CAN BE SUPER GOOD
Q: What are "micro-cap" stocks?
A: Micro-caps are companies with market capitalizations under $25 million. You can easily determine the market capitalization of any company: Simply multiply the current price of the stock by the number of shares outstanding.
Q: Are micro-cap stocks the same as penny stocks?
A: Penny stocks are generally defined as those selling for less than $5 per share. Micro-cap stocks are usually also penny stocks.
Q: Why are these stocks so cheap?
A: There could be one reason, or a combination. For example, a company selling at higher valuations could encounter a major problem. If it's downrated by the analysts and abandoned by the shareholders, the stock price can nosedive. Even a successful turnaround can go unnoticed, thus the recovery would not be reflected in the price. On the other hand, many of these companies stumble and never recover.
Often, after an initial public offering (IPO) at higher prices, a stock will slide when the speculators sell and rush off to chase another rainbow. This leaves some companies with excellent prospects for future success selling at bargain prices.
There is always a large pool of development stage companies with new ideas to promote. Some have the right combination of attributes--over time they will grow and flourish. They will reward their loyal shareholders with substantial profits. We want to focus on these positive attributes to find good investments.
While there is risk in micro-caps, there is also risk in banks, automobile companies, and computer manufacturers. Look what happened at Enron, K-Mart, and Global Crossing! Yes, there's risk everywhere, but the potential rewards in micro-caps are enormous! And consider this: The typical small company is pretty transparent. They can't afford to hire teams of accountants to cook their books, and they haven't got much to hide. They focus on market development and product improvement!
Q: Why is this a particularly good time to look for these stocks?
A: Thanks to incredible coincidence - a huge amount of "bad news" hitting the market at the same time - stocks are seriously depressed. Good stocks, bad stocks - they're all in the dumpster! It seems as though nobody wants to buy stocks. However, as the smart investor knows, the time to shop for stocks is when nobody else wants them. And right now, smart investors are quietly buying promising young companies because the long awaited turnaround is about to come. This is the best time for "bottom fishing" in years!
RISK vs POTENTIAL PROFITS
Q: What sort of potential profits could I anticipate?
A: That would depend upon several factors:
a. the type of business you select...
b. the company's influence in its marketplace...
c. corporate attributes and management's skill...
d. your stock's purchase price vs selling price...
e. that intangible, unpredictable element known as "luck".
Q: Where does the selection process begin?
A: It begins with you! Ask yourself which of the following has the better chance of success:
a. a new fast food chain...or mining company - or -
b. a new company with a patented new product which effectively solves a common problem at reasonable cost.
Identification of high potential companies is essential to your success.
The sooner you find these companies, do your homework, and buy their stock the better. Find a company before it's discovered by Wall Street, buy its stock for pennies and sell later for dollars, and you will have what investment genius Peter Lynch calls a "tenbagger". For example: Pay $2.00, sell at $20 = a tenbagger. Pay 40 cents, sell at $20 and you have a fiftybagger!Q: What risk would I face?
A: The ultimate risk, of course, is that the company goes out of business and you lose all you've invested...and remember--many of these outfits will muddle around indefinitely or eventually close their doors. Only a few have what it takes to become superstars. Sure, it's not easy to find a diamond in all that mud - that's why you've got this booklet. However, you should also remember that most of the great businesses in the market today began in exactly this manner!
FINDING THAT POTENTIAL SUPERSTAR
Q: Should I buy what my advisory newsletter recommends?
A: A typical newsletter will tell you that "ABC company is a great buy at 64 1/2." Do they tell you how you'll make a lot of money, when you can barely afford 100 shares? Do they tell you how to avoid losses when the big company takes a nosedive? This happens--even to the biggest. Somehow, management never tells you the company is going into the tank. The big guys always walk away with their pockets full, while the little guys - small investors and the employees - always get their pockets picked. Again, look at Enron! A leading newsletter watchdog recently reported the results of a multi-year study: Newsletters guessed wrong more than 50% of the time!
Many advisors use obscure criteria for their recommendations: Graphs that look like candlesticks...or chili peppers... mysterious statistical relationships, and so on. Is this really investing? Are you willing to trust your hard-earned money to this kind of thinking?
Q: Okay, I realize I shouldn't blindly invest in some stranger's guesswork. So how can I make big profits in some of these stocks yet minimize the risk of losing money?
A: The best opportunities for making big profits--even a tenbagger or better--lie in the micro-cap marketplace. But remember, this is a high risk environment, not suitable for core savings or retirement funds, but just right for those dollars you have set aside for "aggressive" investing. And I mean investing, not in-and-out trading.
Q: But what happens to my investment during a recession - or when the market "corrects", as it did a while back? What's the long term effect of a great national tragedy, like the terrorist attack, or of the invasion of Iraq?
A: If you picked your investment because it had a high-potential future--and nothing fundamental has changed--hang on; remember that your interest in the company is in growth--the power of new ideas--not in a bounce-around stock price. Stocks are like boats in a race--they all go up and down with the tides, but only the good ones will win the race!
You can maximize your potential profit--and reduce your exposure to risk--if you learn how to find the high potential stocks yourself. Buy them before they're discovered--at prices you can afford--and make truly significant profits. Learn to think--and act--like a venture capitalist!
My name is Bob Harrison. I'm not an investing genius--just an amateur small investor with some good experience. And yes, I am selling something--my "back to basics", do it yourself booklet. I don't recommend any stocks! I won't whisper any hot tips in your ear! However, in 21 pages I'll cut through the hype and nonsense, and show you how to make money in the micro-cap marketplace at less risk, by picking the right stocks yourself. How do I know anything?
I made $30,000 on a $3 stock--a tenbagger--that paid for my retirement boat and more!
Someone asked me a good question not long ago. "If you've got such a terrific system for finding great stocks, why are you selling booklets?"
My answer was simple: "This is a stock selection system. Once you've picked them, you only need to monitor your selections and allow time for them to mature. (Of course, sometimes you make a mistake. Then you have to start over. There aren't any guarantees you'll always be right. It's just like real life!) I have several investments running (I suggest no more than three), so I've got plenty of time for fishing--and the booklets pay for the gas!"
Learn how to pick winners in micro-caps while reducing the element of risk. Find out why you don't need those expensive subscriptions and high-priced advisers. Understand why the turmoil of life in our insecure world or the current choppy markets won't affect your long term goals.
Here's how to order this dynamite 21 page booklet: Send US$7.00 (includes first class return postage), Canada US$8, all others US$10. Ask for the "Stocks" booklet. Make your check payable to Bob Harrison, and mail to 2125 West 15th Street, Port Angeles, WA 98363. I guarantee your satisfaction! If you don't think you can succeed with this, simply return the booklet in 10 days for a full refund.
Here's a bonus! With your booklet I'll include a personal note, telling you what I believe will be the three hottest fields of the decade. I've done my homework, and my confidence in the future of these technologies is so great that I'm fully invested in them myself!
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