{"id":29180,"date":"2012-04-19T22:42:02","date_gmt":"2012-04-20T02:42:02","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/04\/small-caps-a-way-to-bet-on-developing-marketswithout-investing-overseas\/"},"modified":"2012-04-19T22:42:02","modified_gmt":"2012-04-20T02:42:02","slug":"small-caps-a-way-to-bet-on-developing-marketswithout-investing-overseas","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/04\/19\/small-caps-a-way-to-bet-on-developing-marketswithout-investing-overseas\/","title":{"rendered":"Small Caps \u2013 A Way to Bet on Developing Markets\u2026Without Investing Overseas"},"content":{"rendered":"

By MoneyMorning.com.au<\/a><\/strong><\/p>\n

The lucky investors who bought shares on the Cambodian stock exchange’s first trading day racked up a tasty 47% gain.<\/p>\n

This follows the opening of a stock exchange in Laos last year. And news that Myanmar<\/a> (Burma<\/a>, to old timers like your editor) also plans to open an exchange.<\/p>\n

These markets are what investors call, “developing markets<\/strong>.”<\/p>\n

<\/span>
\nThey’re typically high-risk. And in countries that have a limited capital and financial market.<\/p>\n

Despite that, big investment firms (especially hedge funds<\/a>) like these markets. Why? Because they can place big bets on stocks where they could make a big return.<\/p>\n

Such as a 47% gain in one day.<\/p>\n

The kind of return they can’t<\/em> get from backing boring old blue-chip stocks<\/a> on the New York, London or Australian stock exchanges.<\/p>\n

But for private investors, it’s not so easy to punt on these developing markets. But don’t worry. You won’t miss out.<\/p>\n

Because there’s another way to punt on developing markets. And it’s right here on the Australian Stock Exchange. It involves investing in stocks the big hedge funds would love to invest in, but can’t…<\/p>\n

Small Cap Stocks – The Aussie “Developing Market”<\/h3>\n

<\/center><\/p>\n

When you read about big investors making big bucks from betting on Cambodian, Vietnamese<\/a>, Indian or Chinese stocks, there’s a chance you feel some jealousy.<\/p>\n

After all, surely it’s not fair that the big boys make all this cash, while it’s too hard – and expensive – for you to play the same game.<\/p>\n

Well, let’s set your mind at rest… so you can tone down the jealousy.<\/p>\n

The big funds don’t necessarily invest in those exotic locations because they want to. They invest because it’s the only<\/u> way they can boost their returns.<\/p>\n

You see, most hedge funds would rather invest in their own back yard: Aussies in Australia, Americans in America and Germans in Germany.<\/p>\n

Trouble is, the bigger a hedge fund becomes, the harder it is to invest in speculative stocks<\/a> without it affecting the stock’s share price.<\/p>\n

And thanks to exchange rules, once you own more than 5% of a company, the company has to disclose this info to the market. That’s a nightmare for investment firms. Because disclosing holdings to the market means disclosing info to their competition.<\/p>\n

And as soon as the competition knows what they’re up to, the advantage is gone.<\/p>\n

So for many big firms, investing in Australia’s “developing markets” is just too hard. So they pack their bags and head off to search for investments overseas… where the disclosure rules may not be so strict.<\/p>\n

It’s why American investing big shot, John Paulson<\/a> used billions of his clients’ dollars to buy shares in obscure Chinese timber firm, Sino-Forest.<\/p>\n

Not because he necessarily wanted to, but because to get the kind of returns he was after from a stock, he just couldn’t invest his clients’ money in the U.S. market.<\/p>\n

Unfortunately, Paulsen’s Chinese bet went bad. And his clients lost a lot of money.<\/p>\n

That can happen when you don’t understand the market you’re investing in. That’s why we prefer to bet on Aussie<\/u> “developing markets”… otherwise known as small-cap stocks<\/strong>…<\/p>\n

Gains You Won’t<\/u> Get from Blue-Chip Stocks<\/h3>\n

<\/center><\/p>\n

The fact is, as a private investor you don’t need to take unnecessary risks. You don’t need to research thousands of foreign stocks… worry about foreign exchange rates… or political instability… OK, maybe the last one, that’s hard to avoid wherever you invest.<\/p>\n

The best thing is, you get to invest in stocks that could make you a 47% return in a day. And those stocks are available right here on the ASX.<\/p>\n

If you don’t believe us, look at the following list. These stocks had the biggest percentage gains on the ASX yesterday:<\/p>\n

Acuvax Ltd [ASX: ACU] +100%<\/p>\n

Metal Storm Ltd [ASX: MST] +100%<\/p>\n

Q Ltd [ASX: QXQ] +75%<\/p>\n

Somerton Energy Ltd [ASX: SNE] +42.9%<\/p>\n

Quest Petroleum NL [ASX: QPN] +37.5%<\/p>\n

Malachite Resources Ltd [ASX: MAR] +35.7%<\/p>\n

Funtastic Ltd [ASX: FUN] +29.4%<\/p>\n

Actinogen Ltd [ASX: ACW] +26.1%<\/p>\n

Isonea Ltd [ASX: ISN] +25%<\/p>\n

Nex Metals Exploration Ltd [ASX: NME] +25%<\/p>\n<\/blockquote>\n

There isn’t a single blue-chip stock among that list. And not one of these stocks has a market capitalisation over $81 million.<\/p>\n

It goes to show you that the best opportunity for big returns is in the smaller end of the market<\/a>. That’s where the big money-multipliers are.<\/p>\n

Of course, most of the stocks we’ve listed are too small or risky even for us to tip in Australian Small-Cap Investigator<\/a><\/em>. But there are plenty of other small-cap stocks<\/a> that are suitable investments<\/a>.<\/p>\n

In short, big stock market gains aren’t something just for obscure stocks in under-developed countries. It’s also for private Aussie investors who are looking for a stock market boost.<\/p>\n

It may sound exciting to invest in a so-called developing market, but the reality is, for private Aussie investors, there are enough great opportunities on the ASX without having to send your money overseas.<\/p>\n

For more proof, don’t forget to check out this latest presentation<\/a>. It gives you the lowdown on how we pick stocks, including our top five small-cap stocks on the ASX today.<\/p>\n

Cheers.
\nKris<\/strong><\/p>\n

The Conference of the Year “After America” DVD<\/a><\/p>\n

Why You MUST Speculate<\/a><\/p>\n

Disruptive Technology Stocks For Smart Small-Cap Investors<\/a><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nSmall Caps \u2013 A Way to Bet on Developing Markets\u2026Without Investing Overseas <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au The lucky investors who bought shares on the Cambodian stock exchange’s first trading day racked up a tasty 47% gain. This follows the opening of a stock exchange in Laos last year. And news that Myanmar (Burma, to old timers like your editor) also plans to open an exchange. These markets are what … <\/p>\n

Continue reading “Small Caps \u2013 A Way to Bet on Developing Markets\u2026Without Investing Overseas”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-29180","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/29180","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=29180"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/29180\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=29180"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=29180"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=29180"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}