A Different Approach to Value

A few of the stocks I will recommend will also tend to be less liquid -- which is to say they will have fewer shares outstanding and trade fewer per day. This just means that it may take you longer to acquire a full position in some of my suggestions. If you consider a stock that I add to the model portfolio trades only 50,000 shares per day, then you may discover that it might take a week or more to get to a sizable position.

If you typically think of yourself as mostly a large-cap player but want to try these kinds of names, you will find that you can't simply drop a 10,000-share order in the market and have it filled right away near the market price. You may have to work it more. This is obviously what the large funds do.

As my Value Investor stock candidates become increasingly popular, as I think they will, then with any luck, by the time you are ready to sell they will be trading a lot more shares and it will be much easier to exit than it was to enter. For example, when I first suggested MGP Ingredients(MGPI) to readers of my growth-oriented research service in January, it was trading only around 10,000 shares a day. By the time I recommended a sale in February, it was trading 100,000 shares a day. When the stock peaked four months later, it was trading 500,000 to 3 million shares a day.

The point is, don't get freaked out by low trading volume. Consider the idea, then if you like it, trade into it slowly but steadily over time, just as the large funds do.

And finally, rest assured that I will focus on large-cap value, too, opportunistically from time to time, and perhaps more programmatically as the economic cycle rolls on.

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