Small Cap Technology
Small companies, usually technologically advanced start-ups, prosper in rough times like those we are seeing in the economy today. Their position in the market is usually undervalued, and their ability to drive emerging markets into new stages of growth offers long-term investment opportunities.
An example of a company that fits this description would be Origin Oil. their position as technology leaders in the highly invested sector of algae biofuels will allow them to realize long-term growth and will help develop this infant industry. A Warren Buffet “buy and hold” mentality must be implemented into your strategy when you commit to investing in companies such as Origin Oil.
The difference between the guys at the yacht club comparing their yachts is: the guy with the small yacht bought Microsoft at five and sold it at ten. The guy with the medium-sized yacht bought Microsoft at five and sold it at 20. The guy with the biggest yacht in the club bought Microsoft at five and still owns it today. If you do plan on selling, sell half of your position once the stock doubles from your buy price, and let your profits do the rest of the work. This will minimize your risk immensely and perhaps offer you better sleep at night.
Use your intuition and do your research when deciding to invest in companies like Origin Oil. Practice a long-term Warren buffet “buy and hold” strategy, and reinvest the dividends. Follow their developments closely—and stick with your gut.