The place where you're going to find the multi-bagger's are almost always in the smallest companies.

And so it is an area to fish where not as many people are fishing and if you're looking for value that's the place to do it.

I'm Mary Long and that's Bill Mann. He's a regular on Motley Fool money, but in his day job, he's the director of small cap research here at the fool. Bill joined my colleague Ricky Mulvey for a primer on small cap investing.

They discuss why institutional investors aren't terribly interested in small companies,

why retail investors should be,

and they take a look at a few stocks you may want to add to your

watch list. Let's start off. Let's do we're going to do some standard

interest stuff and then I'm going to get into the three sectors of small cap investing at least for the purposes of this show

But I want to you know make this friendly to a newer investor because this isn't buying a mega cap,

this isn't buying an index fund,

these are rockier waters.

So to the director of small cap investing,

to the director of all cap investing,

is that what I said? To the director. Oh, okay. To the director of all cap investing is that what I said to the director right okay to the director of small cap investing what counts is small cap investing generally speaking a company that is too small to be included in the S&P 500 would be just would be considered to be a mid-cap or a small cap.

So there's no real firm definition here in the US.

We put the boundary at about $5 billion in market cap and below the smallest

companies that are in the S&P 510 to be 11 or 12 billion dollars.

And you know what, it's interesting because we tend to think of the S&P 500

as being 500 huge companies and you've heard of all of them.

I bet if you start at the top of the table and start working your way down, you don't get too far before you come across the company that you've never heard of before.

But even below that, below the 500, that's when you start getting into companies that really are

obscure and small and hopefully growing and becoming more successful in some way.

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