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Small Cap Investing 201

Motley Fool Money

Are You Giving Younger Companies the Benefit of the Doubt?

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You have to keep in mind when when companies go bankrupt. You know, they are much more on a razor's edge. And so what you need to do with smaller cap companies that are not generaing profits, or are not generating free cash flow is test the thesis. Make sure that you understand what the path is. If you see a new excuse for why they're not free cash flow positive, for they're no closer to profitability, that's a company that you probably want to get out of.

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