I want to point out that investors should never make statements such as micro-cap or small-cap companies are better investments than large-cap companies. Size on its own does not make any difference. There are advantages and disadvantages with both. For example, the author says "Business plans and financial statements of small companies are much easier to understand than those of larger companies, making analysis easier."
I totally agree with this statement. Large companies may have so many segments and divisions that it is easy to get lost. Investors should only invest in companies, big or small, if they are good businesses selling or trading at favorable prices. That's it.
The author does a pretty good job describing to readers how micro-cap companies differ from large-cap companies. He also argues that it is smart for investors to follow the Federal Reserve Bank's decisions because these decisions have a larger effect on smaller companies than they do on larger ones. Read this book, but just remember that size alone does not make as much difference as the author suggests.
- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market