fact: “Almost all of the superior returns offered by small stocks come from micro-cap stocks with
market capitalizations below $25 million.” -James P. O’Shaughnessy
fact: $10,000 invested in micro-cap stocks on December 31, 1951 soared to over $29 million in
value through 1994, achieving a compound growth rate of over 20% for the 43 years reviewed.
fact: It is in the stocks with tiny market capitalizations that academic research has
proven it is possible to beat the market.
conclusion: ShadowStock.com looks at value companies that Wall Street and the financial press
ignore. ShadowStock.com will help educate readers to build their own micro cap value
fact: The Stock Market is far more efficient than Wall Street would like to acknowledge. Institutions
and professional money managers have a vested interest in keeping this a secret.
fact: Wall Street, Mutual Funds and Hedge Funds spend millions each year on equity research, yet
the majority of professional managed money still fails to out- perform the market averages.
fact: Efficient Market Theory states that one should not be able to use publicly available
information to develop strategies that out-perform the market.
conclusion: It is futile struggling to find inefficiencies in stocks covered by Wall Street and the media,
which by their high profile, go against the most basic Efficient Market Theory.
