The Prudent Small Cap (formerly Graycell Small Cap) model portfolio focuses on the universe of stocks from $200 million to up to around $4 billion in market capitalization. The investment focus is to participate in the early growth stages of a company while diversifying sufficiently across industries and the market cap range that includes small cap stocks (up to $3 billion) and early stage midcap companies, known as SMIDs (small midcaps). The return objective of the quantitative model-driven portfolio is to outperform the Russell 2000 over a 12-month period. Over its long history, the model portfolio performance has surpassed its objective quite convincingly in most years. The portfolio comprises up to 10 stocks that are about equally-weighted. The model portfolio was first published in 2003 as a weekly service and published for 7-years till 2009. It was then resumed from 2012 to 2015. Since 2016 the model portfolio is offered as a monthly newsletter service.

Financial instruments inevitably rise over time. Even inflation creeps higher.
Since 1926, a period of about 100 years, small cap stocks have materially outperformed the large caps.
If economic conditions are sound, small caps generally outperform due to a higher risk-reward. 

One can observe the power of compounding in the chart above.
Even a mere 2% differential in compounded return can lead to an exponential difference in $ returns,
$56,000 return (small cap) vs $14,000 (S&P 500).
(Results of small cap performance can be lower than large caps for different time periods)

Small caps are generally defined as stocks with a market capitalization (market cap) between $200 million and $3 billion. Such stocks are typically riskier than larger-cap stocks. The risks to small cap companies include less liquidity (lower volume of shares traded), less research-coverage compared to larger cap peers, greater sensitivity to unconfirmed market rumors or hearsay, less institutional sponsorship, and relatively limited access to financing options. However, the greatest opportunities for capital appreciation also lie in the small cap and early stage midcap stocks, principally because of their undiscovered nature. The key is to manage down the risk, since it cannot be eliminated, and find a blend of risk and reward that optimizes the risk-adjusted returns. We believe a wider market cap range that includes the relatively more stable SMID or smaller midcap companies can also contribute towards managing down risk and enhancing risk-adjusted returns. Consequently, the Graycell Small Cap Model Portfolio has a targeted market cap range of $200 million to around $4 billion.

The focus for the model portfolio is on generating consistent and strong benchmark-beating returns. This is achieved through a highly disciplined approach to investing combining a number of aspects including market direction analysis, rules-driven quantitative modeling using fundamental and technical variables, and being process-oriented. Overlaid on this investing approach is our belief in the Power of Compounding. Strong consistent returns boosted by compounding over the long-term can unleash tremendous portfolio growth over time.

Investors must use the enduring power of the markets and the magic of compounding to build long term wealth.

(Historical performance is not an indicator of future performance, which can differ materially)

The Prudent Small Cap model portfolio is a complete investing game plan, a plan that has mostly outperformed benchmarks over entire economic cycles. Each month with the Prudent Small Cap Portfolio service, a subscriber receives access to a model portfolio of up to 10-stocks that are chosen. Based on your determination of its relevance to your unique situation, you now have the ability to use a systematic market investing approach driven by quantitative models.

 I had read your work on Seeking Alpha and subscribed to the Prudent Biotech and the Graycell Small Cap newsletters. Since 2017, it has worked out fabulously. 2022 has been an up-and-down year so far, but I believe staying the course is important. Thanks for the service and you've earned my renewals.

Christopher M.

Dallas, TX

Nice work. It's helpful and has made my portfolio management easier.

Roberta S.

San Francisco, CA

It's great. I started the Biotech and Smallcap services a few years ago and then added Healthcare when it came out. Never looked back. I am happy and being a broker, my clients are satisfied too.

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New York, NY

Prudent Small Cap

These are powerful words of wisdom in an old proverb.
You've to start somewhere, sometime.
Building Investment Wealth Over Time.

There is no guarantee of future performance. Nonetheless, it should still be noted that various studies and scholars have provided empirical evidence that bolsters the thesis that systems outsmart individual judgment consistently.

If you feel our system can help grow your investment wealth over time, then don't wait!

The Decision is Yours Now!

Buffett made the above comment while referring to the card game of Bridge. But his words hold a vital truth for investing as well.

Below are a few samples.

Thanks for reading and Good Luck!

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Graycell Advisors, and its affiliates, officers, employees, families, and all other related parties, collectively referred to as ‘Graycell’ and/or ‘we,’ is a publisher of financial information, such as the Prudent Small Cap, Prudent Biotech, and Prudent Healthcare newsletters. We are not a Registered Investment Advisor (RIA). Historical performance figures provided are hypothetical, unaudited, and based on our proprietary analysis and system performance, back-tested over an extended period. Hypothetical or simulated performance results have limitations, and unlike an actual performance record, simulated results do not represent actual trading and consequently do not involve the financial risk of actual trading. The performance results obtained are intended for illustrative purposes only. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Past performance is not indicative of future results, which may vary. All stock and related investments have a degree of risk, which can result in a significant or total loss. In addition, the biotech industry and small caps are characterized by much higher risk and volatility than the general stock market. Information contained herein is general and does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors. If you decide to invest in any of the stocks of the companies mentioned in the newsletters, samples, alerts, etc., sent to you or available on our websites, you can and may lose some or all of your investment. You alone are responsible for your investment decisions. Use of the information herein is at one's own risk. We are simply sharing the results of our model. Nothing should be construed as a recommendation or an offer to buy or sell any securities, and we are not liable nor do we assume any liability or responsibility for losses incurred as a result of any information provided or not provided or not made available on time, herein or on our website or using any other medium. We cannot guarantee the accuracy and completeness of any information furnished by us. We may or may not have existing positions in the stocks mentioned in our reports. Our models are proprietary and/or can be licensed and can be changed or revised based on our discretion at any time without any notification. Subscribers and investors should always conduct their due diligence with any potential investment and consider obtaining professional advice before making an investment decision.

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