17 Oct 2014

Are Micro Caps Signaling a Bottom?

There are many interesting things going on right now and one of them, in my view, is the sharp rally in micro cap stocks in the past four trading sessions. I’ve noted in earlier missives that small cap stocks are having a very tough year so far, especially at the end of the third quarter (just in time for your quarterly reports, I’m afraid). The following chart shows the relative performance… Read More

2 Oct 2014

Patience is a Virtue

Every investment strategy requires patience. Let’s say, for example, that you believe, as we do, that small cap stocks tend to outperform large cap stocks over time. You’ve got the empirical data going back to 1926 that clearly shows, with statistical significance, that small stocks outperform large ones. Small stocks are more volatile than large stocks, but that fits elegantly with the theory that to earn a higher return, you… Read More

14 Jul 2014

Penny Stock Scams

On Friday, the Wall Street Journal ran a story about a company with no assets, no revenue and only one employee that has a market value of more than $6 billion! I immediately had three thoughts. First, I was reminded of a story that I read in 2000 (I found it online here) during the technology bubble.  One of my favorite authors, Michael Lewis, wrote a column about NetJ.com that… Read More