Here's an excellent overview of how to pick small company shares. And the best part is that this applies for large companies as well. But if you want, you can always invest in funds which invest in small caps. All the elements in here are what you will do in your own business, look after the details, check the board and management, look for a good track record, don’t invest in something that you don’t understand etc. etc. Very nice and basic information that so many people don’t follow, son. If you want to become a banker, then this is also very useful information. And the reason why this is so straightforward and popular is that this is common sense.
You can print this off and keep it as a checklist when evaluating companies, absolutely worthwhile
How to pick small-cap shares
By John Lee
Small-cap shares tend to outperform the broader market significantly over longer periods, even allowing for their greater volatility, and have turned in particularly notable performances since the worst of the financial crisis passed.
They are less well covered by analysts and the media, so the chances of finding an undervalued nugget are high for those prepared to do the legwork. In addition, small-caps can grow faster from a lower base than their larger rivals.
John Lee was one of Britain’s first “Isa millionaires”, and made much of his fortune (now over £3m) via judicious investment in smaller company shares. His book How to Make a Million – Slowly, is published by Pearson Education next week.