You’ll notice that last year was a great time to be a small-cap investor. More than nine stocks on the ASX rose 1,000% or more. Will 2018 be just as good? I personally think it’ll be even better. Stocks have fallen initially. But it’s only a matter of time until they rebound. And when they do, it will be you on the other end of massive gains. So where could you see these 10-baggers for 2018?
Founded in 2003, Sandfire Resources focuses on discovering, developing and operating high-quality resource assets. Recently Sandfire’s share price has been on fire. At time of writing, the stock was up 3.29% for the day.
The technology industry has been extremely active in the last decade. You always hear about a new tech start-up trying to disrupt an industry. Whether it is fintech, blockchain or cyber security, technology is always striding ahead. So how can you profit from new tech start-ups, innovation and a changing landscape?
Much of the world is currently a bit doom and gloom when referring to the stock markets. Our speakers presented thoughts and ideas that weren’t necessarily optimistic, but they shed a bit of light that might make the future less daunting.
You’re looking for small-caps with the potential to grow earnings. How do you know earnings will grow? Well, maybe it’s as simple as looking at the industry. Small-caps ready to double, triple and quadruple can be found in the resource, tech, finance and a whole bunch of other sectors. But when trying to grab a 10-bagger, it helps to look in growing markets.
Small-caps are an amazing opportunity. They have far more volatility, but that’s the point. Not all small-caps are worthy investments. Some could be amazing. Others you’d be completely crazy to buy. Today we’re going to look at how to approach small-cap investing. Specifically, we’re going to look at how to limit our losses.
Let’s look at the large blue chips. These are usually companies with a market cap of $10 billion and over. Some typical blue chips are BHP Billiton Limited [ASX:BHP] and Commonwealth Bank of Australia [ASX:CBA]. BHP has a market cap of $156 billion and CBA has a market cap of $139 billion.
Investing is not an exact science. Its why there’s no formula or process that will guarantee returns 100% of the time. There are, however, key factors that will determine the price of a stock over time. The most important is earnings power.
As our market dips lower, the so called ‘experts’ are screaming ‘buy the dip’. But the best thing to do might be just to sit and think. Out of curiosity, what are the ‘experts’ predicting now? Some are incredibly bullish and others are incredibly bearish. Nothing has really changed.
I’m not just describing the technical or momentum trader here. Value investors also fall into this camp. Instead of buying stock they believe to be cheap. They buy stocks they believe the market will believe are cheap. For most, this kind of strategy turns out exactly how you’d think. It wastes a whole lot of time and money.