Micro-cap

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Mar 3, 2010 6:28 am

Folks - I'm looking into a small micro-cap allocation.  Would you treat it as "similar to small cap" but more volatile, or a different class altogether.  The fund buys over the counter stocks - less liquid I guess.  Any thoughts would be appreciated.

Mar 3, 2010 8:11 am

Different  asset class.  One of the biggest challenges, besides these companies being typically speculative, is that the Fund will have a harder time to enter and exit positions without moving the market - depending on Fund size.

Mar 3, 2010 8:46 am

I think it depends on what you want the fund to do and your expertise in the areas you will be investing.
For example, are you nanotechnology expert?  Biotechnology?  Alternative fuel?
When you are speculating, you need to have a firm background in the are you are going to invest.  And asset allocation means you'll have to be an expert on a lot of different areas.
Also, OTC is a dangerous game.  Look for micros that trade on the Nasdaq (there are plenty).  Keep the fund small, no more than 30 positions.

Mar 3, 2010 9:20 am

Wait, is he running the fund himself or looking to invest in one?
We have an OTC stock in our fund, and talk about a PAIN IN THE ASS.  The thing is barely a position in the fund, but heave forbid it doesn't trade and I have to go through the process of FAIR VALUE PRICING.

Mar 3, 2010 9:59 am

Wait, is he running the fund himself or looking to invest in one?
We have an OTC stock in our fund, and talk about a PAIN IN THE ASS.  The thing is barely a position in the fund, but heave forbid it doesn't trade and I have to go through the process of FAIR VALUE PRICING.

I actually have no idea what he is trying to do.  I think he was talking about running the fund himself.

Mar 3, 2010 12:56 pm

Wet_Blanket:

Wait, is he running the fund himself or looking to invest in one?
We have an OTC stock in our fund, and talk about a PAIN IN THE ASS.  The thing is barely a position in the fund, but heave forbid it doesn't trade and I have to go through the process of FAIR VALUE PRICING.

moraen:

 I actually have no idea what he is trying to do.  I think he was talking about running the fund himself.


These quotes are frustrating.