Three Reasons Why You Can Beat Wall Street in Microcaps

As I explained in yesterday's essay, a lot of people are scared of investing in microcap stocks... That's why at my company Altimetry, we've created a system focused on making sure the financials are real... the management team is aligned with investor interests... and the company's true performance and valuation are compelling. We help police […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily] Three Reasons Why You Can Beat Wall Street in Microcaps By Joel Litman --------------------------------------------------------------- [Your one-step inflation survival guide]( With inflation accelerating and stocks crashing, you need a different investing approach. A 20-year market veteran shares an easy, one-step plan, [including details on his No. 1 gold recommendation today, right here](. --------------------------------------------------------------- As I explained in yesterday's essay, a lot of people are scared of investing in microcap stocks... That's why at my company Altimetry, we've created a system focused on making sure the financials are real... the management team is aligned with investor interests... and the company's true performance and valuation are compelling. We help police the microcap space and guide investors to opportunities for big gains. It's something we've been trying to talk to our institutional clients about for years... But they typically won't listen. Importantly, as an individual investor, their disinterest works to your advantage. Institutional investors shy away from microcaps for three main reasons... And because of that, you can make big returns if you find the right microcap stocks before money managers start paying attention... - Lack of liquidity Institutional investors struggle to allocate capital in high-quality microcaps simply because microcaps don't trade enough shares. Hedge funds have no interest in investing $10,000 to make $13 million. They want to be able to invest $10 million and turn it into $13 billion. Plus, fund managers don't want to end up with oversized stakes in tiny companies. That's easy to do in microcaps. Once a fund's ownership crosses the 5% threshold of a company's stock, it needs to file a 13D – a special filing with the U.S. Securities and Exchange Commission ("SEC") to designate itself as a material shareholder. That means more paperwork. And the simple act of filing might prevent the fund from trading more of the company's stock because it's now viewed as an insider. Even worse for the fund, it would take time to get invested in the stock. It couldn't invest all $10 million at once, or it would blow the stock up, since the average microcap trades less than $10 million worth of shares per day. That inability to get in and out in quantity keeps institutional investors away from microcap stocks. --------------------------------------------------------------- Recommended Link: [Do this while the market is falling]( This move could help you avoid massive losses this year and help you double your money. All you have to do is buy one stock. [Click here to learn more](... --------------------------------------------------------------- 2. Almost no Wall Street coverage Without analyst coverage, institutional investors have to do more work on their own to find out what's going on with microcaps. Fewer people focused full-time on the company means fewer people to hold management's feet to the fire and provide insight about industry dynamics. That lack of a helping hand means many people won't spend the time necessary to successfully invest in the space. However, that creates an opportunity you almost never get on Wall Street as an individual investor... an information edge. Information about major companies is more widely available today than ever before. That's not the case for microcaps. And it means huge opportunities for folks who are willing to focus on these stocks. 3. Microcaps fall outside of institutional investor mandates Many institutional investors aren't allowed to own microcap names because of their own internal rules. Funds are only allowed to invest in companies that meet the criteria they laid out when they wrote their fund documents. That means they can only invest in large-cap companies, mid-cap companies, and so on. For most of them, microcaps are off-limits. Some of the most compelling moneymaking situations we've seen over the past 10-plus years have been in this space... But because our institutional clients can't buy them, they tell us not to even bother talking about them. That's why we believe the lack of institutional-investor involvement in the microcap world presents an amazing opportunity for individual investors. The inefficiencies in this market give us a chance to buy the right companies with the right due diligence for incredible upside. When these stocks appear on institutional investors' radars, they take off... like Vipshop (VIPS), a company that drew the interest of one of our institutional clients. After crossing a $500 million market cap, the stock was 580% higher in 12 months. These stocks have massive upside if you can identify the right ones. And right now is an even more exceptional opportunity... Microcaps are incredibly cheap thanks to the broad market sell-off we've seen this year. And the same volatility that crashed stocks now has the potential to send these smaller names soaring. The small-cap Russell 2000 Index is down more than 30% from its November highs... And the Russell Microcap Index remains down nearly 35%. The market has punished these companies as harshly as the better-followed names out there. That's part of the reason why we at Altimetry are positioning our readers to take advantage of this opportunity... We think of it like a land rush in the financial "Wild West." Institutional investors can't – or won't – take on the challenges of this little-understood space. But as long as you have the right tools, that just means individual investors have a rare opportunity to be the biggest winners. In fact, in a brand-new presentation, I explain a secret that the world's wealthiest investors use to exploit hidden discrepancies in the market... and how it could help you make 500% to 1,000% gains in the world of microcaps. [Get the details here](. Regards, Joel Litman June 16, 2022 If someone forwarded you this e-mail and you would like to be added to my e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2022 Empire Financial Research. All rights reserved. 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