Motley Fool Money Small Cap Investing 201
Aug 20, 2022
Join Bill Mann, Director of Small Cap Research at The Motley Fool, as he uncovers the hidden gems in the world of small-cap investing. He shares strategies on how to spot lucrative opportunities beyond the radar of institutional investors. The conversation spans vital metrics for evaluating future company success, with amusing insights into the restaurant industry featuring Wingstop and Red Robin. Mann also discusses the resilience of small caps, touching on unique sectors like workers' compensation insurance and even wine subscriptions, offering a well-rounded perspective on navigating this dynamic market.
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Active Participation in Small-Cap Investing
- Small-cap investing requires active participation and research due to less available information.
- Be prepared to learn about lesser-known companies and do your homework.
Small Caps: Volatility and Individual Investor Advantage
- Small caps are more volatile due to limited information and lower liquidity.
- Individual investors have an advantage as they can invest where institutions cannot.
Institutional Constraints in Small-Cap Investing
- Large institutions like Charles Schwab avoid small caps as their investments often exceed market caps.
- Diversified mutual funds face limitations on how much they can invest in a single small-cap company.
