MicroCap Investing

© The Astrologers Fund, Inc. Last Updated:

RISK WARNING: MicroCap Investing carries a high level of risk to your capital.  ONLY speculate with money you can afford to lose.  This type of investment is not suitable for all investors, so ensure that you fully understand the risk involved, and seek professional assistance from your licensed financial advisor or broker.

Q: What does the "bull" in "Bulletin Board" stand for?


"Investors should remember the 'three R's.'
Resist the impulse to buy,
Research your investment and
Report fraud when it happens."
Mr. Hoerl, SEC on Microcap Fraud







I am writing this while the SEC crackdown on Microcaps is front page news.  I strongly applaud its action in general, and feel it will help make investors more careful.  From a cyclical viewpoint, we were correct in forecasting that there would be an explosion of activity from January to March 2000.  We are expecting another bull run (although less wild) from Mid October until the end of 2000.   Remember, Microcaps rarely lead Bull markets, but follow in most cases as investors are willing to accept more risk.  Consider the following five points carefully before you invest:

1.  First, decide what percentage of your investing/trading capital will be allocated for speculative high risk/high reward investments.  Know BEFORE you buy whether you are buying for a long term investment or a short term trade.  If you are not experienced in microcap investments, then work with an independent, professional licensed financial advisor.

2. Choose your stocks carefully.  If trading, treat microcaps like non-expiring options and just trade one or two stocks at a time.  If investing, diversify and spread your risk with small investments in a basket of five to ten stocks.

3. Understand Money Management and take profits: "If you ignore your profits, they may just go away."  Remember for every Microsoft, hundreds of small caps lose in the long run.
Risk means you can lose money as well make money.  You should be willing to accept losses, which means being wrong.  Don't double up on losers to try to get even.  If, however, you believe a stock is undervalued and represents a reasonable risk/reward, then you may double up if this was your original plan.

4. Take advantage of market cycles. Buy a little ahead of the crowd, but more important, sell before they lose interest.

5.  Have a plan and stick to it. Know in advance if you are investing and/or trading (don't let a losing trade become an investment).
One classic strategy is to sell 1/2 if a stock doubles or triples and then hold for the long term the rest.

I repeat, ONLY and ALWAYS use risk capital, money you can easily afford to lose without materially effecting your life style.

"DUE DILIGENCE OR DO NOTHING"

What are the odds?  At best, only one in 10 start-ups succeeds.  Then there is the advantage of using astrology.  We believe this improves the odds considerably. Fortunately, most start up companies are eager for any investors and therefore astrological data, such as the time of incorporation, first trade, president's birth data, is often readily forthcoming with a just a phone call from a potentially serious investor.

For more information on the Microcap market, visit our Microcap web links as well as Tips for investors to avoid bogus stock pitches and the SEC's Microcap Stock Guide for Investors.


"The odds are acceptable that you can at least make 100% profit as easily short to intermediate term as you can lose up to 100% in the same time frame.
However,  you will NOT lose more than your original investment as you could in futures or by writing options...."
WSNW Subscribers may wish to reread our initial 1999 post on LAS VEGAS INVESTING
as well as Rules for Successful Microcap Investing by smallcap digest

(c) 2000 The Astrologers Fund. No part of this report may be reproduced or distributed in any form or by any means, except for brief passages quoted for review without the prior written permission of the publisher.
ALWAYS CHECK WITH YOUR LICENSED FINANCIAL PLANNER OR BROKER BEFORE BUYING OR SELLING ON THE RECOMMENDATIONS OF THE ASTROLOGERS FUND.
DISCLAIMER: PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE FORECASTING ACCURACY OR PROFITABLE TRADING RESULTS.
The Astrologers Fund Accepts No Liability Whatsoever For Any Loss Arising from Any Use Of Its Report Or It's Contents. The Astrologers Fund Or Its Clients Usually Holds Positions In The Stocks and/or Market Instruments Mentioned And May Buy Or Sell At Any Time Without Notice. This Information Is In No Way A Representation To Buy Or Sell Securities, Bonds, Options Or Futures.
 
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