RE:news releaseWith Little Liquidity - Why Invest in Juniors?
Juniors have a lot less analyst coverage than large caps.
A $200 billion giant could have over 30 different professional analysts covering the stock. They will analyze the company inside and out. Their research will be read by the world’s largest investment managers.
It’s not uncommon for a junior to have ZERO professional analysts covering it. The management at some juniors can go a whole year without fielding a call from a professional analyst.
To me this is a great, great thing.
The lack of widely disseminated information about juniors allows us to get a big “information edge” in this market.
It means we can find pricing inefficiencies and uncovered opportunities that can explode higher very quick. The junior market isn’t swarming with professionals looking under every rock. That is if you know how to analyze this information.
You can think of it like this: would you rather take your child on an Easter egg hunt with 100 other kids or with 5 other kids, of which 3 don’t walk yet and 1 doesn’t want to leave his mother's side?
Your child will find a lot more eggs competing against those 5 kids.
And the prize will be a lot bigger.
If you know what to look for, who to follow and when to buy, your portfolio will also benefit from the TSX-Venture discount in a bear market. Granted, 98% of the companies are worthless and run by useless management.
But the 2% can make you very, very rich.