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daily reckoning reccommendation, page-6

  1. 5,048 Posts.
    rumchuck,

    this may help you.

    the subject is titled.... Innovators, Imitators, and Idiots

    here is part of it.


    Nick is right about two things. First, there is a long way to go in the
    commodities boom. There are more good stocks than analysts in
    Australia. That gives you, the individual investor, a huge opportunity
    to buy excellent companies with growing earnings at reasonable prices.
    It's one of the big reasons I moved to Melbourne in 2005.

    Second, there has never been a better time to be an investor in small
    alternative energy stocks. Warren Buffett says there are three phases
    in any wealth-building cycle: the Innovator, the Imitator, and the
    Idiot. There are plenty of Idiots in the financial markets. But there
    are also are plenty of Innovators in the energy markets.

    You should know that picking small cap stocks was my very first job in
    the financial publishing industry ten years ago. I started
    conservatively, looking for small cap value using Graham and Dodd style
    investment analysis. Over the next five years, I sat on the advisory
    board of an organisation of high net-worth investors looking for early-
    stage investments in high-growth companies.

    It was exciting stuff, looking at a business from the ground
    up...running the numbers...talking to the management...establishing a
    valuation for the company...and calculating how much investors could
    expect to make-if they were will to take the risks that come with
    investing in small companies.

    Now for my confession. If you're a perma-bear, I hope you'll forgive
    me. Over a year ago I began editing a newsletter dedicated to finding
    the best alternative energy, technology, and small-cap stocks in
    Australia-the companies trying to Innovate their way into the next big
    wealth-building cycle and take their shareholders with them.

    In the Daily Reckoning my job is to tell you about the problems and
    pitfalls you may not otherwise hear about. But let me be clear: I
    believe Australian investors can build a world-class portfolio of small
    cap alternative energy shares that will do extremely well if global oil
    prices remain high (as I believe they will) for years.

    How's it going? I won't lie. The market's been tough. Bear markets are
    brutal to small cap stocks. But my single best-performing stock so far
    is one I tipped at just .63 cents. It's now trading for $3.39...and
    believe it or not, that's after a major correction. Yet I believe-for
    reasons I've highlighted below-the best is yet to come. It is a world-
    class Innovator.

    You see with small stocks it isn't so much the number of your winners,
    it's the size of the gains. You want to keep your losses small...and
    your winners big.

    A warning: speculating in small stocks is not for everyone. I
    discouraged my own family from following my tips because I knew it
    didn't suit their conservative temperament or their investment goals.
    Stocks with unproven business models are inherently risky. As with any
    stock, your biggest risk is you could lose all your money.

    But after careful research and investigation, you may agree that I've
    uncovered some of the best alternative energy stocks Australia has to
    offer. Of course you won't know until you find out what sort of shares
    I'm talking about. To read about my best performer so far and what else
    you may want to be aware of in the great period of Innovation ahead, go
    here http://www.portphillippublishing.com.au/research/asi/0806.cfm?source=e9aaj705&alias=8L

    With regards,

    Dan Denning
    Editor
    The Australian Small Cap Investigator
 
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