By now, you have probably seen our banner ads or e-mails inviting you to enroll in our Succeeding With Small Caps online investing seminar, scheduled to begin on October 16th. Some of you may have wondered: "What is this small-cap investing seminar?" Others may have asked themselves, "Is small-cap investing right for me?" Still others may have pondered the age-old question: "Now where the heck are my car keys?"
For those of you asking a variant of the first two questions, I'll try to explain more about what kind of experience you can expect from our latest event seminar. If you're the person wondering about the car keys, you don't need this seminar; you need the "Find It."
How does it work?
Beginning on October 16th, seminar participants will receive eight lessons, two each week, geared towards helping intermediate to advanced investors improve their small-cap investing results. Each lesson also contains supplemental reading that will provide additional details on some of the concepts covered in the lesson, or data that supports the conclusions presented. Of course, the best feature of all of our event seminars is the opportunity to interact with a team of like-minded investors as you discuss the lesson content and share experiences and investment ideas with some very smart and talented folks.
Why invest in small-cap stocks?
Of the 10,000 or so companies that trade on the three major U.S. exchanges, the majority of the investing world focuses on, at most, the largest 1,000 or so companies. That being the case, small-company stocks tend to be where the market is likely to be most inefficient -- which spells opportunity for the savvy private investor who is willing to go where Wall Street and most institutional investors don't bother to explore.
If you think about it, there is only one compelling reason to invest in individual small-cap stocks: the opportunity to purchase high-quality companies at a better price than one would have to pay to purchase a larger, well-known company of similar quality. Companies that fly under Wall Street's radar represent the best opportunity to bring home a gem at cubic zirconium prices.
Of course, small-company investing requires both patience and expertise. Like a flea market or garage sale, there is a lot of junk out there. Most stocks are cheap for a reason. There isn't a lot of media coverage or investment research available for most of these companies, so investors have to rely on their skills and judgment. Small-company investing is also where a lot of people get burned.
But as former Fidelity manager and investing legend Peter Lynch likes to say, for every 10 rocks you look under, you'll find a tasty grub (assume for a moment that that's a good thing.)
What we'll cover in the seminar
In this seminar, we'll look at small-cap investing from many angles. We'll review historical returns of small caps vs. large caps. We'll explore the difference between "value" investing and "growth" investing, and we'll share resources for finding great investing ideas. We'll provide back-tested data and spreadsheets from our Foolish 8 investing strategy and explore ways to fine-tune your search to uncover the best investing candidates.
More importantly, however, we'll explore at some length the mindset and effort required to make small-cap investing worthwhile.
Who should take the seminar?
The Succeeding With Small Caps seminar is meant for intermediate to advanced investors. Before delving into small-company stock investing, you should be very well versed in P/E ratios and profit margins. You should know your way around a balance sheet and income statement. Small-cap investing success requires that one can carefully evaluate a business, and you should be very familiar with the basic tools of business analysis and stock valuation in order to get the most out of this seminar.
In short, this seminar is for serious stock enthusiasts and hobbyist investors. You should have time, at least several hours a week, to pursue the research you'll need to do to get great results from small-cap investing. Finally, you should be comfortable being out on your own, without the Wall Street research reports and mainstream financial media articles to help you make your decisions. You'll have to learn to trust your own judgment and develop your own investing style. This seminar is designed to help you do just that.
We hope you'll join us. You can register for Succeeding With Small Caps in FoolMart.
Zeke Ashton writes for the Fool's Small-Cap column and The Motley Fool Select. The Motley Fool is investors writing for investors.
