Why Investors in MicroCaps Shouldn’t Time the Market

When it comes to value investing, patience isn’t just a virtue; it’s a necessity. This is especially true for microcaps, which is really categorized as value investing to the extreme. While large cap and blue chip stocks may be undervalued by the market at times, it is rarely to the extent of those in the microcap space.

With little-to-no media coverage or attention from the larger investment community, many of the opportunities in this arena may take long periods of time before their actual value is realized. The misconception is that microcaps is where fortunes are won and lost overnight. In reality, it can take months or even years before a small company is recognized by investors. When it does, however, the take-off can happen very quickly.

Microcaps expert Stephen Kann shares thoughts on the risks of market timing and how investors should approach opportunities in this space instead. Read the full article on Equities.com.

Why Investors Need MicroCap Diversification

If there is any such thing as a free lunch in finance, diversification would be the closest investment principle to it. A well-diversified portfolio provides investors with a good balance of reducing risk but still enough exposure to capture profits. When dealing with microcaps, it is critical that investors understand this concept. Given that most opportunities in this space can promise astronomical rewards, many undisciplined investors tend to forget or disregard the risks involved.

Equities.com discussed the art of diversification in microcap investing with Stephen Kann, to gain some insight on this topic. Read the full article on Equities.com.

Navigating Through Microcaps With a Critical Eye

Navigating through the microcap space in the financial markets can be dangerous for a novice investor. The promises of overnight riches can often lure investors walking blindly into pitfalls in the pursuit of fool’s gold. In addition to nerves of steel and discipline of iron, investors also need a guide of sorts. Someone that knows the lay of the land and can cut through the embellishments and right to the essentials.

With over 25 years of experience in corporate finance in the microcap space, Stephen Kann certainly qualifies as an expert. His experience includes more than $300 million in transactions, including private placements, PIPEs, reverse mergers, IPOs and M&A. He has been an equity research analyst on both the buy and sell side.

Equities.com spoke with Stephen to pick his brain on how he approaches the microcap space and what can learn from his experience. Read the full article on Equities.com.

Improve Your Business Game

Excerpt from Southland Golf Magazine

by Andre Peschong

I see parallels between the market and the deal-making environment that often accompanies golf. Is it any wonder that so many business deals get done during a round?

Golf is a game of confidence and concentration. There’s good concentration, such as setting up to a shot, and bad concentration, such as wondering when the beverage cart will pass by.

Read full article


No Slack with SPACs

Excerpt from Blogging Stocks

by Tom Taulli

Equities are ailing. And yes, the IPO market is basically dead.

But there is a bright spot: Special Purpose Acquisition Corporations (known as SPACs). Essentially, this is a new-fangled public offering.

So, what’s going on here?

Well, I had a chance to interview Andre Peschong, who is a veteran investment banker and has his own blog, Deal Flow Diaries.

Read full interview

The Allure of Angel Investing

Excerpt from Forbes.com

by Andre Peschong

Angels are the new venture capitalists. Sound like a bold statement? Not so if you look at recent statistics.

Angel investing has been on a consistent upswing since 2003, and it is attracting high-net-worth individuals who want to take a more proactive approach to early-stage investing. According to Ernst & Young, since 2000, the number of venture capitalists has declined by 50% while the number of angel groups has more than doubled.

Read full article

LOHAS: The Next Secular Shift

Taken from Seeking Alpha
by Andre Peschong

We all see the market grasping for some piece of news that will hopefully signal a market direction or at least a short term move. The bad news seems to be mounting not only in the US but also in the world economies. Mounting debt is still plaguing a recovery, while at the same time putting the inflation watchers on alert.

Read the full article


By David Shabelman, The Deal, March 26, 2004

Amid a budding revival for initial public offerings this year, there have been no drkoop.com sightings, nor are there any IPOs in the pipeline akin to those of Internet toy retailer eToys Inc. or online grocer WebVan Group Inc., the two other famous Internet “growth stocks” of the late 1990s that ultimately went bust. Such speculative offerings simply aren’t possible these days. In fact, without profits and a high profile in a major technology sector, venture capitalists and entrepreneurs won’t find any takers among public investors. Says Venky Ganesan, a principal at Globespan Capital Partners: “Your average cookie-cutter software company with $40 million to $50 million in revenue isn’t going to go public unless they have a unique story. The underwriters will take you, but you will become a public market orphan, which doesn’t create value for anybody.” Ganesan should know. Earlier this month he dropped plans to seek a public listing in 2005 for one of his firm’s portfolio companies, Trigo Technologies Inc. Instead, he chose to hook up with IBM Corp., which bought the maker of product management software for undisclosed terms March 9. Read more

New Stocks Use The ‘.com’ Ending Again

By Raymond Hennessey, Wall Street Journal, April 12, 2004

Being a dot-com is suddenly back in fashion.

After two years that saw many companies change their names to drop the tarnished suffix from their corporate names, potential IPOs seem to no longer feel there’s such a stigma. In the last several weeks, several companies with “.com” at the end of their names have filed for initial public offerings of stock, including salesforce.com Inc., Shopping.com Ltd. and Advertising.com Inc. Read more

Accounting Unknowns Make Investors Wary of Chinese IPOs

By Elizabeth Wine, Financial Times, April 12, 2004

Investors are having a touch of accounting deja vu, but the less-than-forthcoming financial statements are not coming from American companies this time but from Chinese ones.

Reports have been trickling out that some of the hottest Chinese initial public offerings misled investors with false or incomplete financial statements, leaving some experts murmuring about the bursting of another market bubble. Read more

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