We all would love to buy smallcaps, but there’s not necessarily enough stocks that make for real long term investing, or enough that can take the volumes that would give you satisfactory returns.
We explore these stocks in the Smartcaps Portfolio where we have smallcaps that look interesting, but are not large enough to fit our momentum picks (in terms of turnover), or not long-term enough to be able to sit in our Long Term portfolio. Most of these stocks will have a trigger that is likely to push up profits or the stock price in the near term.
We used to have a portfolio called “Smartcaps”. This used to be what you (subscribers at Capital Mind) discovered, and we would do the back-end analysis to prescribe the stocks.
Smartcaps now takes on a different definition. They’re just small-cap stocks with interesting future prospects or a big trigger. How you could participate is:
- If you agree with the logic, buy in small quantities over some time
- These stocks are illiquid. It makes little sense to buy a large quantity
- You might want to have your own exit criteria since we think these stocks can fall 50% or more. Very very risky.
- And these are smallcaps. They can even go into lower circuit for days at a time. We’re just emphasizing the risk some more.
None of this is investment advice of course – this is just our opinion. Please consult an investment adviser if you need personalized advise.
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