SERENE SMALL-CAP AND MODEST MID-CAP?

“We are in bear phase barring 6-7 stocks”.

May be it is true for Sensex and Nifty stocks. But if we consider Mid-cap and Small-cap stocks, it is entirely a different picture. They have outsmarted Sensex and Nifty by a wide margin. The launch of Mid-cap and Small-cap specific funds by all and sundry Fund Houses are the best proof of it.

Mid-cap and Small-caps offer ample opportunities, but question is how to identify them. There are thousands of stocks listed in BSE and NSE. To pick the winner should be definitely an arduous job. I am trying to frame rules for me for the vary purpose

The stock should be in news, so that people know that it exists.
The news should be in positive note. Financial well being and acquisition aboard goes well with Indian investors.
Investors’ interest is to be judged by the P/E value. It should be in higher range than its peers. Mid-cap and Small-cap stocks do not follow rationality; they tend to have unreasonable valuations.
Have any experts told anything positively in prime time TV, studied and reviewed in popular finance magazines? If yes it is a good sign.
Never go near them in downward market, they tend to go down at a much faster pace than the market.
Invest only the portion of your money, which you can effort to lose completely.
Monitor closely, book profit at the drop of anyone’s hat.

I will try to frame more rules and welcome anyone’s addition to this set of rules.

Some Mid-cap favorites of my fancy are:

Yes Bank because it has the potential to go further.
JBF Industries for the good stories behind.
Dena Bank as it is bookies favorite.
Finolex Industries for the high opinions of Small investors.
East India Hotel may be it is in an emerging sector.
Sriram Transport, you need logistics everywhere.

I will buy at least two of them after the market cools down and invest around ten thousand bucks on each. If I am lucky in picking up the correct scripts I may even double my money in double quick time.