The tricks THEY don't want you to know about...
“The Essentialist's Short Guide To Excellent Small Cap Investing...”
Traders, Investors & Market Watchers:
Remember your first trade?
I do. Kinda. It was Wachovia (WB) – I remember how anxious I was to place the order. My hands were sweaty. My chest tightened and my stomach almost fell outta my butt.
And for good reason. The trade went terribly. It bombed. HARD. Well, maybe bombed isn’t the right word… - It was acquired by Wells Fargo. Baha
Fast forward to present day: my “trade anxiety” is long gone.
I guess when you when you start your trading career in late 2007 you can’t help but improve. Or go broke, right? Fortunately, I did the former.
Wanna hear what worked for me? …
… What if I pinky promise to make it quick, simple, low-tech and newbie friendly?
“Uhh, does a one-legged duck swim in circles, bro?”
OKAY, SO HERE’S WHAT I DID:
1) I traded and traded and traded and traded. (Weird, right?)
Practice makes perfect and putting my money where my mouth was really lit a fire below my Captain’s chair. I truly felt the pain of every learning experience and was monitarily rewarded for good buys, (which quickly became addicting.)
2) I took advice, tips & alerts from newsletters, syndicates, forums, pretty much everywhere.
Did I get a ton of bad information? – Sure.
Did I get bits and pieces of the “truth” about the stock market? – You bet ya.
Eventually, I was able to put some of the pieces together and formulate a trading strategy that worked more times than not.
3) I traded “faster”
Faster is relative here: I was just a young Jew making trades out of my Ma’s basement for a while there. I’m definitely not talking about HFT (high frequency trading) right now.
I’m talking about trading using Optionshouse so I was able to see bids up to the millisecond of investing. Learn more here: or, how to get Optionhouse's Platform FREE by clicking on the image below:
4) I Pursued “less but better.” (Greg McKeown. Essentialism. Worth a
I don’t use fancy algorithms, visually beautiful technical indicators or PE ratios. And, although I use them, I don’t rack my brain over a company’s fundamentals.
All I do is locate rocket ships fully loaded with rocket fuel and patiently wait for ignition.
Where the rocket ship is a company, rocket fuel is all the "stuff" the company is puruing (blockbuster drug candidates, producing a next gen widget, operating in a newly legalized business, etc...) and ignition is news from the company (phase 2 FDA approval, 50% increase in sales, marijuana legalized recreationally in 3 new states, etc...)
5) Trade Quality Small Cap Stocks (The Lean Startup by Eric Ries, also worth a read.)
When I found out what caused investments to rocket higher, I then realized that not all market caps were created equal. A company with the market cap of, let’s say Apple - $595.89B ($595,089,000,000) is a lottt different than trading a company with a market cap of $300 Million.
That explanation leads nicely into a key differentiator between a quality small cap and a pretender or the much maligned penny stock…
And that is: the float, or shares that are actually available for trading.
VERY simply put, a small float will result in fast percentage gains for a stock and a large float will result in slower percentage gains.
Too small of a float, and you've got too much unpredictability. Too large of a float and you don't have a lot of stock price movement. A quality small cap stock has it juuuuust right...
Okay, that’s more than enough teaching for one article…
If this type of stuff interests you, enter your email below.
And we’ll start emailing you small cap stocks that are actually worth putting at the top of your watch list and we’ll send them to you BEFORE their massive run higher.
Oh yeah, and we’ll do all that work for you absolutely free! – Yep, seriously, no catch.
And don’t worry: if you’re not feeling it, there’s an “unsubscribe” link at the bottom of every email that we send. Click it and you’ll never hear from us again.
But consider the upside of opting-in:
You’ll get real-time small cap stock alerts with a full report of the company written by my team and you’ll get regular updates on said stock.
And, if you miss trading the alert, don’t worry! – We send new ones regularly (usually once or twice a week) so you’ll always have a new qualified stock pick to trade.
It might be worth a looksie:
I mean, at the very least, have a chuckle my old school
Either way, thanks for reading.
1) Small cap stocks? Don’t you mean penny stocks?
Not usually, Mr. skeptic. – Small cap stocks are usually not penny stocks. Small cap stocks are just stocks with a relatively small market cap (between $300mil and $1bil) where as penny stocks usually only trade on the OTC with a much lower share price. About half of the stocks that we focus on are traded on the big boy markets (Nasdaq and NYSE) and another large chunk of OTCs that we follow are actually traded on other reputable exchanges, like the TSX (Toronto Stock Exchange) but also have an OTC ticker so Americans can buy shares of their company as well.
2) What sectors should I focus on?
Oh boy, that varies month to month… Since the elections, we’ve been focusing on biotechs, which have gotten a massive boost from the surprise Trump victory. However, it wasn’t too long ago that we were seeing massive returns from Medical Marijuana stocks And before that, it was Gold and precious metals. This is why we suggest subscribing to our newsletter so you'll know which sector is hot.
3) Do I need a traditional stockbroker to trade these stocks?
Absolutely not! – Just sign up for an online account over at Optionshouse.com by clicking on this awesome deal here: Trade Free For 60 Days When you Open a New IRA Account with OptionsHouse! and trade them over there.
4) Do you trade the stocks that you send to us over email?
Absolutely not! – That would be insider trading and if anyone were despicable enough to do that, then the SEC would rightfully investigate him or her faster than you could say Bugatti Chiron. Our newsletter is simply a free stock market news and information service.
5) I didn’t read any of this — can you sum up what you said?
Sure: make great trades and you can’t lose.