Who should target small stocks?
It is my true conviction that those with less than one year’s experience investing in individual stocks should not even think about investing in small cap stocks, particularly if you haven’t found your rhythm with the mid- and large-cap universe yet. Also, until you know your way around a balance sheet, income statement, and cash flow statement like you know the route from your house to the nearest convenience store, don’t even think about it. Finally, you need to be suitably prepared to take everything you hear and read with a grain of salt, be ready to challenge every assumption, and in short, examine every possible scenario that could cause your company to fail in order to ensure that you are getting a real business for your money. Also, you need to have the time and the desire to keep digging for more information, even after you’ve bought the stock, so that you know more about it than your average Fool small-cap writer. Even armed with the disclaimers above, it’s best to concentrat
