Small
companies offer the highest possible potential returns, as a matter of scale,
since it is far easier for a company with $10 million in sales to double its
revenue, than for a business with $10 billion in sales. Most of the innovation
introduced in the private sector is through small-cap companies, and innovation
is not only a target for investment but a fuel for overall economic growth.
Matter of fact, in 2010, the Kauffman Foundation published a report that showed
that without fast growing, early stage companies, job growth would have been
negative in America for the past 35 years. According to the National Venture
Capital Association, 92% of the job creation that occurs with small businesses
is after their initial public offering and they are already trading.
It
can well be argued that large-cap companies are net job destroyers. For
example, when a Wal-Mart moves into a neighborhood, studies have shown that
even after the initial hiring of new employees, once the store is in place, the
community has 15% fewer jobs. Large cap companies are more likely to offshore
jobs to a third world nation to cut labor costs. Profits are less likely to go
into developing new facilities to create jobs. Over the past ten years, the
companies in the favored large cap index, the S&P 500, spent over $3
trillion buying back shares of stocks. This benefits the stock options of their
CEOs and the hedge funds that trade the majority of their shares, as it shrinks
stock supply to raise valuation. However, those were funds that could have been
placed into retained earnings, used to innovate, and create jobs.
Small-cap
companies can provide the highest rewards to shareholders, and yet they get the
least respect. Last year was considered an exceptional year for initial public
offerings with over $60 billion dollars raised. Yet, the average day of trading
volume on just the New York Stock Exchange alone is over $110 billion.
Innovation and growth is highly valued, yet how Wall Street allocates capital
is questionable at best.
With
well over 20,000 companies that publicly trade, 80% of Wall Street analysts
follow a mere 20% of the largest companies. So the burden of research is placed
on you, the individual investor.
To
help guide you through the vast forest of small companies, TinyGems provides
exceptional growth ideas and aids in the research process to building a
portfolio of successful small cap stocks.
For
more information, visit www.TinyGems.net
About MissionIR
MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
Please see disclaimer on the MissionIR website http://www.missionir.com/disclaimer.html
MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
Please see disclaimer on the MissionIR website http://www.missionir.com/disclaimer.html
