Seven points on how we approach small cap stock investing
for our blog.
This post is not written to claim that we are the most
successful investment blog but rather to share Investorfile’s general philosophy
on what has worked well for us to generate consistent returns for our Top
1. We are a long-term investor
At Investorfile we buy small cap
stocks on the basis of realizing long-term value not short-term momentum.
2. We are a contrarian by default
At Investorfile we never buy
stocks with a herd of other investors as we seek value first. We are often the
only active buyer when initiating a position in a small cap stock.
3. Our best investing ideas are our own ideas
At Investorfile most of (if not
all) of our Top Ideas are not stocks recommended to us but are stocks that are
discovered by us first. The confidentiality of such discoveries ensures the
value of our small cap investments.
target small cap stocks because there is an advantage
At Investorfile we recognize that
the greatness inefficiencies in the marketplace are among small cap stocks. We
take advantage of the mispriced investment opportunities.
5. We use the balance sheet for downside
At Investorfile we acknowledge
that small cap stocks are risky investments and one must expect the unexpected.
But small cap companies with strong balance sheets can weather unforeseen events and
then return to prosper.
6. We do not speculate to hit a 10-bagger, but seek to invest in many 3-baggers
While earning 10 times on an investment
is great, there is significant risk in investing too early in a small company. At
Investorfile we try to reduce the speculation factor but still generate above
normal returns for our small cap investment ideas.
7. We buy and continue to hold positions in all
of our Top Ideas
Our interest aligns with
Investorfile followers who choose to invest in our small cap stock
recommendations. We own our words!
This article is for informational purposes only. This article is based on the
author's independent analysis and judgment and does not guarantee the
information's accuracy or completeness. The information contained in this
article is subject to change without notice, and the author assumes no
responsibility to update the information contained in this article. The
information contained within this article should not be construed as offering
of investment advice. Those seeking direct investment advice, should consult a
qualified, registered, investment professional. This is not a direct or implied
solicitation to buy or sell securities. Readers are advised to conduct their
own due diligence prior to considering buying or selling any stock.