Landed back in Aus and now holidays are over, no wasting time straight back into work.
Did alot of skimming through about 20-30 FA books and narrowed it down to ones which seem most helpful and applicable to pennies. My goal is to finish these in next few months.
Currently half way through "The Micro Cap Investor" which so far has been a great book . A little excerpt from one of the first chapters highlighting the way Micro Caps can been traded which alot of the STT speak about "getting in early before its mainstream"
EMT (Efficient Market Theory) basically means every information past, present, future, technical or fundamental is already priced into the stock.
Ofc nothing is perfect in EMT, but in general large caps are fart more abiding to EMT than small caps. The book does a great explanation of why this is the case and uses other proven theories to do so.
Basically touches on how microcaps aren't strong efficient markets and alot of the information is overlooked by smart money. So often you can find mispricings, undervalued co's before price truly reflects potential.
Book continues to go on about where you should be looking for these inefficiencies in pricing, the major point they touch on is management team being the number 1 winning factor of a micro cap co.
Also another interesting chart from the book....basically showing although small caps are the riskiest asset it falls within the efficiency frontier and you get "bang for you buck" ie. returns are equivalent to the risk you are taking. And if you are able to manage risk well then returns are far better for risk taken:
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@TraderGT
CR8 - Not screaming a buy right now but definitely painting a nice story in the background which keeps me happy. Lets see if it concludes with a bang some time soon.
I've been keeping quiet about CR8 but still upto date on it fundamentally and incredibly happy with the team expansion. Already had a dream team but they honestly keep getting better and better.....
DTZ - Technically I have nothing extra to say which you haven't, I'd literally wouldve posted an almost identical chart.
I've been waiting so long and patiently on this but I think I'm ready to take a pilot entry this week and build a position in here if it can have a quiet day.
Fundamentally, from my understanding they only have a liquid solution GQD available so don't think theyll be implicated in TV's however having the general GQD hype heat up will provide price appreciation.
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Some great weekend discussion on uranium. @WCJ where have you been this whole time mate lols, some great research. Still have some catching up to do and reading posts.
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Top 5 runners 5 2017: These I think have multibagging potential
1. CR8 - Reasons I've touched on before
2. IAM - Reasons I've touched on before
3. CFO - Just a feeling, I don't hold but I've stalked this company back to front more so for a learning experience. If I had to put it in a nutshell. You have a great management team with the SMN link, and Daniel Placha (Founder of Sedgman grew the business to $400m annual revenue). The product itself in simple terms is half a dense as wood but with the same compressive strength as concrete which has anti-corrosive behaviour like a ceramic, that there is an impressive combo. Aiming to sell 80% of production ($2.7m worth of sales) this year and have 20% for inventory. 3 Big clients including Virgin and U.S Navy. In due time if they can provide more contracts I think it will bag from here. The names involved make me confident theyll live up to expectations.
4. CR8 - Why not double up
5. EPT - Reasons I've touched on before
6. CR8 - What is risk management?
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Other news it feels great to be back in Aus. Took this place for granted only realising how great things are here. Every country I go there's always something that puts me off whether it be corruption, humidity, pollution, discrimination, bad weather half the year, lack of public hygiene, traffic....Guess this place has perfect balance of everything.
