A micro stock is a stock from a very small company that has small market capitalization statistics and no depth in management teams. Learn how micro stock companies often have poor reporting on their stocks with information from a financial adviser in this free video on stocks.
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Have you ever considered buying a stock in a company with a very small market capitalization statistic? This is Roger Groh of Groh Asset Management. Typically those very small companies in terms of market cap are micro stocks. There is no magic term for what that actual dollar is but you will know it when you see them. They are the ten million, twenty million, thirty million, fifty million dollar type market cap businesses. Are they bad, no they're not but they're tiny and in small companies you don't have an awful lot of depth typically in the management teams. Also the reporting sometimes can be a little shoddy in micro companies again because they don't have the money or the depth to hire the big accounting groups like a very large company would. The advantage to owning them though is that they can move quickly in terms of developing a new product and in a micro company one new product might really make a difference so like always know what you're buying and really take a hard look at whether you think that the management team today can run a business that's bigger. If it is you might consider micro stocks. If you think that they can't manage a better business maybe you'd better look elsewhere. I'm Roger Groh of Groh Asset Management and thank you very much for spending time with me.