The Long Tail theory is not about music, books, and Internet traffic alone. The stock exchange head is crowded, and worth less than it makes itself out to be. Call tails when the stock market coin is spun, and you will win more often than before.

Every stock exchange has rich pickings of unknown stocks. All we need is help to choose. How can rule three of the Long Tail Theory help us pick top small-capital stocks? Here is a free outline of resources that you can use to fish in a long tail.

1. Rate your analyst. The most established stock market experts use misleading non-verbal communication. Suits and antics cover everything from competence to criminality. Ask for specifics of stocks they have recommended over the last 12 months.

2. Raise questions based on the previous quarter.

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“I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said…” With those mealy words, America’s Depression-era president ventured from bad luck into treachery. The Executive Order he issued on the 5th of April 1933 confiscated Americans’ private holdings of gold, then valued at $20.67 per ounce. Then, in January, 1934, the U.S. president fixed the price of gold at $35. All of sudden, Americans’ dollars had been devalued by 69.3%. Whether this act of nationwide larceny did the economy any good or not, we cannot say. It was not until after World War II that the economy fully recovered the spring in its step. And U.S. stock prices didn’t return to their ‘29 highs until 1950. But there is hardly an act of government so foolish or so maladroit that subsequent politicians won’t provide an encore. This week, ...

Since exchange-traded funds (ETFs) were first introduced in 1993, interest in them has grown steadily. In one year alone, ETF assets increased by a staggering 49% to reach $588.2 billion.

Although ETFs resemble index mutual funds, they actually have a lot in common with individual shares of stock. ETFs can be purchased on margin, sold short, and traded any time the markets are open. If you are seeking an investment that can offer the benefits of both mutual funds and stocks, an ETF may be an option to consider.

An ETF is a passively managed portfolio of securities that is initially sold by an investment company and thereafter traded in individual shares on a stock exchange. The underlying securities may all be from a certain sector or country, or they may track a broad market index.

Taking Stock

ETF share prices are more likely to be based on the demand for the shares themselves

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Insurance is a durable business. No professional enterprise can do without it, in good times and bad. Insurance is also a vital form of security for stock investors. There are abundant and compelling reasons to favor stocks in the insurance business when markets are depressed, under cost pressures, or with uncertain demand trends.

Insurance spawns other enterprises, just like most industries. The entities from which retail customers buy insurance are reluctant to take full risks on their own shoulders. There are other financial benefits in reinsurance as well. However, the reinsurance industry is subject to the kinds of derivative risks from which the stock exchange world has suffered since September 2007.

The insurance business also requires the management of claims. This service, unlike reinsurance, costs little to run, is isolated from risk, and adds significant values. The business model of this small capital member of the Insurance (Miscellaneous) Industry from Atlanta, GA,

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Neither wealth nor the size of an investment portfolio mitigates the effects of inflation. The poor feel the deleterious effects sooner, but uncontrollable growths in operating expenses can cripple even giant corporations.

The stock market is an empowering means of maintaining real values of cash inflows. This investment route is egalitarian. It also allows an additive approach. Some of today’s most influential investors have made modest entries into a stock exchange not so long ago. The system of ADRs allows U.S. investors to buy stocks from countries where inflation may be lower than at home.

Four stock strategies can keep investors ahead of inflation:

1. Let the dividend track records guide stock picks. When did the corporation last skip a dividend? Does the past Return on Average Equity exceed the forecast rate of inflation? 2. Which stock has a Beta of around one? Does it belong to an industry with superior prospects in an inflationary

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