Do you want the good news or the bad news first? Let’s start with what we thought were the highlights of 2014:
- One cannot begin a “Highlights” article about 2014 in MicroCaps without mentioning the budding Marijuana, Cannabis industry. Following the favorable legislation that was passed at the end of 2013, the stage was set for every ‘tom, dick and harry’ to try their hand at developing a business plan that included “Cannabis” or “Marijuana” in it. Across all sectors: Technology, Services, Real Estate, Basic Materials (production of the plant), Healthcare – I think it’s safe to say, Cannabis has many applications. Even though Cannabis can be purchased for recreational use in Washington (state), Colorado, Washington D.C., Alaska and Oregon, and, “23 states have already adopted medical marijuana legislations, the conflict between states and the federal government is once again being highlighted, exposing anomalies and contradictions created by the schedule 1 classification that categorizes marijuana as an illegal substance under federal law and hinders federal funding for research and clinical trials on the medical benefits of cannabis,” according to Todd Davis in, ‘The Path to Marijuana Legalization in the United States.’ We’ll be very interested to see what happens in 2015.
- Russell MicroCap, Wilshire US Micro-Cap and DJ Select Micro-Cap hit all time highs. Historically MicroCap stocks have followed trends of the larger cap stocks and 2014 was a perfect example. Emerging growth companies flourished as the trickle down affect of larger cap profit taking and risk opportunities funneled liquidity into the US MicroCap market.
- Although the Sony hack was definitely a lowlight and terrible breach of security, this event created a tremendous opportunity for MicroCaps in the Cyber-Security sector. Today the FBI posted a want ad not a wanted poster for friendly hackers to join the FBI. Is your website and email safe? Much of the new disruptive cybertechnology has been developed by MicroCap companies and this sector should have huge growth in 2015.
- All the great, successful MicroCap Conferences we’ve had the pleasure of covering this year, including: LD Micro Invitational and Main Event, the Growth Capital Expo, Marcum MicroCap Conference, ROTH Conference, Healthcare Week in San Francisco, Rodman & Renshaw 2014, Aegis Capital Conference, SeeThruEquity, Singular, BIO International, PortTech Expo LA, The FireRock Conference, New Orleans Investment Conference 2014, Sprott Natural Resource Symposium 2014, B. Riley & Co. Annual Investor Conference 2014.
- Positive aspects of Crowdfunding, 506c
- Investor confidence growth in IPOs
- Strength in Healthcare, Technology, Retail
And now, for the lowlights:
- Crowdfunding for equity, which remains not legal, versus non-equity crowdfunding, which is legal, still exists in the gray area. Until it is clear to the market, it is a lowlight.
- The “Accredited Investor” definition is now a moving target as Regulators make adjustments.
- Oil & Gas and Resource commodity price dependent MicroCap companies were a drag on most MicroCap portfolios in 2014 but in 2015 these same depressed companies could be the best buys.
Areas to watch in 2015:
- Tick Rule changes begun in 2014 should be clarified in 2015 which will have a positive affect on the MicroCap stocks. The profitability will return to trading which will increase liquidity.
- MicroCap company uplistings growth was outstanding in 2014 and will surge in 2015.
- MicroCap IPOs, ATMs, PIPEs, will produce an investor frenzy to participate in new offerings.
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