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Wednesday, November 23, 2011

Facts about Investing in Small Cap Companies

Value investor Warren Buffett also falls in the inefficiency camp, claiming that individual investors should be able to earn 50% annual returns with small amounts of money because they have access to high-return small-cap stocks that he can no longer buy because of Berkshire’s huge asset size.

Facts about Small Cap Companies

1.If you want outsized returns, you must invest in small-cap value stocks.

2.All ten of the top-performing stocks of the past decade were small caps and most were value stocks. We can almost guarantee that the top-performing stocks of the next decade will be small caps as well.

3.Most small caps underperform, so the key is either finding the few small caps that will produce the 50, 60, and 70-baggers, or instead buying the entire small-cap universe to insure that you won’t miss out on the big winners.

4.Small caps have above-average volatility and can underperform for long periods, so their outsized returns may require a long timeframe to be realized.

5.Whether small caps are inherently more risky or just inefficiently priced is undecided, but investment prudence dictates that you normally limit your small cap allocation to less than half (some say 35%) of your total equity portfolio and avoid them altogether during incipient periods of severe economic distress.

Saral Gyan equity analysts give best of their efforts to identify good small cap candidates which have the potential to give exponential returns in long term. Its the result of dedication and hard work of our team that Hidden Gems outperforms small cap index by whopping 47% in terms of average yearly returns.

During last one year small cap index has fallen from 10,210 to 5976, down by -41.47% whereas our  2 Hidden Gems out of 12 released by our equity analysts in last one year gave more than 100% returns to our Hidden Gems subscribers.
Below are the two stocks which gave more than 100% returns to our Hidden Gems members.

i) Sri Adhikari Brother Television Network Ltd was recommended in Sept 2010 at a price of Rs. 41 has made a new high of Rs. 85 recently. 100% returns in period of one year.

ii) Camlin Fine Sciences (earlier known as Camlin Fine Chemicals) was recommended in March 2011 at a price of Rs. 60 has made new 52 week high couple of days back at Rs. 152. Returns of more than 150% on your investment in short span of just 8 months.

Equity analyst team at Saral Gyan do not just recommend the stocks but share authentic and unbiased research reports which help you understand the company's business along with growth opportunities and guide you to make an educated investment decision.

Click on the Download link to read /download Hidden Gems research reports: