Let the Winners Run

If a stock is moving up, has momentum, and is still undervalued among its peer group, chances are good that at some point in time it will trade near or at the same multiples of similar companies in the space. That does not necessarily mean the stock will trade at a fair valuation within days, weeks, or even months. Sometimes it takes years for a stock to reach its full potential. Buying these small-cap stocks is not a get rich quick scheme. However, buying a cornucopia of these stocks will increase your chances of having one or two that will appreciate in the near term. Establishing a varied portfolio is greater than if you put all your speculative money in one stock, but remember to let the winners run. Big gains do not always happen in a month. You may buy these stocks and watch them go down before they go up. Buying and selling microcaps is not a perfect science, but sometimes patience is rewarded.