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Why I Like Smaller Natural Gas Stocks Right Now …
By: Money and Markets   Monday, March 19, 2012 1:11 PM
Symbols: XOM
So I fired off a recommendation to my readers before I even left the property.

All my effort was worth it because that recommendation soared by 158%!

But even with my biggest winners, I have to admit that I DO sometimes get a little help from the big guys because …

When You Buy Smaller Companies Early, You Often
See Your Shares Soar Once the Big Money Moves In!

Sure, there are some big-money investors that specialize in smaller companies. But in reality, the vast majority of investors are focused solely on large caps.

Take mutual funds. Many of them are actually PROHIBITED from buying companies with share prices under $5.

But as soon as one of these small caps starts taking off … as soon as a positive piece of news hits the wire … or the share price gets high enough for the funds to pile in … you could potentially see billions of new investment dollars start pouring in … sending share prices doubling and tripling in short order!

So small-cap stocks are one of the rare corners of the market where individual investors like us have an ADVANTAGE over the big boys … because we can get in on the ground floor … before the big money can.

And by putting a relatively small amount into a handful of smaller resource companies … we are perfectly positioned to reap very, very large returns once the Wall Street crowd shows up.

That kind of profit potential is exactly what small caps deliver.

Time and time again, small-cap indices have trounced larger stocks — proving that it's easier for you to make a fortune with select small-cap natural resource stocks than if you just stick to their larger counterparts.

And I'm not just talking about the last few years … this has been true for nearly a century!

Take a look at this chart, which compares small-cap value stocks to large-cap growth stocks.

As you can see, it's simply no contest …

If you'd invested $10,000 in an index of large-cap growth stocks back in 1926, you'd be sitting on nearly $10 million today. Not bad …

But with that same $10,000 investment, an index of small-cap value stocks would be worth more than a billion dollars!

There's just no comparison: Small caps SMASH large-cap stocks in returns … and that's even truer in trickier markets like the one we have now …

A recent study from the University of Chicago looked at 182 periods during which the stock market created average or lower-than-average returns, and they found that small caps outperformed large caps 95% of the time!

What's more, the same study concluded that smaller companies are the first to rocket higher once new bull markets begin!

All this has convinced me we now have a huge NEW opportunity in smaller resource stocks … especially those companies involved in America's "new fuel revolution."

So if you haven't taken a closer look at smaller energy stocks lately, I encourage you to do so right now — especially those companies that are involved in the areas of natural gas and domestic oil production. I think you'll be extremely glad you did!

Yours for trading profits,

Sean Brodrick

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