days of buying a large-cap big name stock
tucking it under
the mattress for a few years and expecting to double your money
are over! If it were that easy everyone would be doing it. The
problem is that many of the household name companies (like Dell,
Microsoft, Disney, Coke, Home Depot, GE) have saturated their
markets and simply cannot grow 50% each year as they've done in
the past. So, what are these companies to do? Growing through
merger and/or acquisition work's on paper but in reality
not so simple. Statistically speaking, 1 out of every 3 mergers
As for those growth companies of the 90's, it's simply unreasonable
to expect the AOLs and YAHOOs to double and split their shares
2 times a year
Certainly not anytime soon
is all the money going? How can one capture the gains that were
so common and widespread just a short while ago? Investors must
either reduce the earnings expectations (ROI) or augment their
investment philosophy / approach.
Small-Caps and Mid-Cap Stocks
Today's market discussions focus on multi-national MEGA-CAP stocks.
These are the same securities that have been questioned on the
integrity, complex balance sheets, accounting practices and legitimacy
of order flow. If you don't have a trained eye in the areas of
Debt, Financing, Executive Compensation, Pension Structure, and
International Exchange Policies looking at the balance sheets
of mega corporations is like looking at a plate of spaghetti!
why smaller and mid-sized growth companies will receive the lion's
share of the new capital that will be pouring into the market
in the immediate future. Remember, no one ever got rich buying
a stock at $30 and selling it at $40 (up 33%). The idea of long-term
investing is to isolate a unique situation in the market place
that can produce geometric and even exponential gains!
not talking $2 or 3 million
$10, 50, or even 100 MILLION
is made through BIG WINNERS!! Today's money managers with substantial
holdings in today's mega-cap stocks are in for a rude awakening.
They own stocks that have 1, 2, or even 5 BILLION shares outstanding
and are down 50 - 75% or more! If these stocks ever do rise to
their previous levels there won't be sufficient liquidity to close
out these positions without squeezing the little guy.
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