The Little Book of Big Profits from Small Stocks Summary - Chapter 1

Chapter 1: The Classic under $10 Stock

1.      Low-priced stocks are one segment of the market where individual investors have huge advantage over institutional investors.

2.      It’s simply easier for a $10 stock to go to $15 than a $50 stock to go to $100. This is why the best low-priced stocks are referred to as breakout stocks in this book.

3.      There are three things that breakout stocks share:

a.       Low-priced (mainly under $10)

b.      Undervalued

c.       Have specific catalysts in the near future that put them on the threshold of breaking out to much higher prices.

4.      When the breakout stocks begin to break out, the snowball effect kicks in as institutions climb on board and drive the price of shares even higher.

5.      The key is to differentiate if a stock is a breakout stock instead of a broken stock. 

Chapter 2: The Price Is Not Just Right, It’s Critical