James Altucher submits:

I think the best way investors can get an edge is to focus on underfollowed small-cap companies with enormous potential markets and the following attributes:

• Good arbitrages between potential value and current value (by looking at other companies in the sector)
• Good co-investors who are experts in the space and are buying shares.

I’ve been looking at a small-cap stock in one of the largest sectors of biotech – cures for Hepatitis C. Inhibitex (INHX) has a $180mm market cap, $24mm in cash, very favorable comparisons when placed side by side with its competitors (its main competitor is one year ahead of them in FDA trials but has a $1.5bb market cap, over 8 times bigger), and good institutional investors who have been steadily increasing their holdings.

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Gary Gordon submits:

One might have surmised that the $113 billion dollars to bail out country #2 of the European “PIIGS” would have calmed financial markets. Yet the ongoing debt crisis in Europe has been about as harmonious as it was to have my youngest sister dictating the course of conversation at the Thanksgiving Day dinner table.(Note: I’m counting on the fact that the majority of my relatives don’t usually read my financial commentary. If the joke makes it through the grapevine, well then… I apologize for the humor at my sister’s expense.)

Clearly, there are real risks in the investing world, from sovereign debt worries in Europe to Korean war games to escalating inflation in China. Nevertheless, there’s equally compelling evidence for the continuation of worldwide economic recovery… as well as the asset appreciation that occurs alongside choppy recoveries.

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Proactive Investor submits:

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David Hunkar submits:

The chart below shows the historical investment returns for various indices from 1995 thru 2009:

Click chart to enlarge:

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Alan Brochstein, CFA submits:

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