Best investment strategy

Excerps from a Montley Fool article - About Hidden Gem

http://caps.fool.com/Index.aspx

the world's greatest investor would buy a special kind of common stocks that some of the world's top investing minds can't stop raving about. Here are just a few reasons why...

• When Ibbotson Associates analyzed 70 years worth of data — it discovered that these stocks outperformed every other type
• Another study by Oppenheimer Capital reveals that this particular class of stocks has outperformed the S&P 500 by a wide margin since 1925
• The highly respected CPA Journal confirms that "the lack of coverage by Wall Street produces a highly inefficient market in these stocks that breeds opportunity"

Comments - The reason why invest in SMALL SIZE. Other reasons:

• In fact, a big player like Buffett has massive amounts of capital to put to work. It's simply not practical for him to take positions in small-cap stocks — no matter how undervalued or how much he loves the business.

• The same goes for most professional money managers and mutual funds. With hundreds of millions or even billions to invest, most institutions can't buy high quality smaller stocks without 1) running up the price and 2) buying up a controlling share of the business.

Return of Small but Undervalued stock:















lookout for undervalued companies that offer...

• Pristine balance sheets with low debt
• Solid, cash-generating businesses in profitable niche markets
• Outstanding management with large ownership stakes

One limitation - Have to be less than 1 million investment fund. Otherwise, it will drive up price and buying controlling shares.