When I first stumbled on VMG in March, or there about, I could...

When I first stumbled on VMG in March, or there about, I could not believe that such a good share was so cheap, so I presumed that the market must have known something that had eluded me. Anyhow, I researched further and all that I could find on the Internet only enhanced my conviction that this was a $3-to-$4 share paying a good dividend and selling at half its value, so I hurled $40K at it for my SMSF at some $1.51 a share - twice what I would typically invest in a small cap.

VMG went up a bit (hitting $1.72 at its highest), and then fell as the end of the tax year approached, so I bought another $10Ks worth at $1.45.

Look at the figures yourself - this is a solid business. Look at the analysis of VMG at http://www.arafurapearls.com.au/Console/files/djc%20report%20march%2008.pdf, which values VMG at $3.85. Anyhow, I am happy to sit on my $50K investment, pocket the dividend, and just maybe, sell at some distant future point at twice what I paid for the shares.

Other than the figures (yields, debt/equity ratios and the like), other good omens are that the directors are happy to hold shares and increase their holdings via the DRP.

Another good-looking small cap of roughly similar complexion is CXG. Michael Coote owns a huge chunk of CXG, which can be both a good and a bad thing. Anyhow, I bought $40K of these too at $1.16 each.

Let us see what saying turns out to be the more apt - "Never venture never gain", or "A fool and his money are soon parted".

Pioupiou