What percentage of small cap companies fail?

[Aussiesteve]

I am trying to gain some sense of the prospects of ASX stocks in the micro cap category. I know in the U.S they refer to them as penny dreadfuls and are generally not well regarded by the establishment, until of course they emerge as the next Apple or Walmart. I understand they represent high risk but potentially high reward. For the record, I have made some good money out of some of them (TME, PHG, ORI, CPH, AVZ ) and have only made minor losses on others (still hold CPH and AVZ currently in what I hope to be temporary downtrends) . That might have been beginner's luck because I really only understand a fraction of what there was to know about each stock and I am an absolute TA girly man ( but doing my bench-presses as we speak). Any ideas what percentage actually go broke? A list of such companies would be handy for research purposes - eg where might they have gone wrong; this may help to recognise similar signals in others?

 

[galumay]

I guess it depends what time frame you set, all companies fail in the end - but thats probably longer than your timescale, especially if you a trader!

 

[Aussiesteve]

I definitely do not have the skills or interests to do short term trading. More interested in medium to long term. Just curious to know which companies have gone completely under and no longer list with the ASX.

 

[Joules MM1]

you can do some basic research on cap size versus deregistration dates

https://www.asx.com.au/asx/research/delistedCompanies.do

http://www.delisted.com.au/failed-companies/delisted

...which companies have gone completely under and no longer list with the ASX.

how is that knowledge going to assist you ?

 

[galumay]

10,000 or so in the last 100 years, surviorship bias is real!
Check out http://www.delisted.com.au

 

[explod]

Not sure of recent times but I found about one in ten made it. I understand that this rough number generally applied to new ideas.

In my view one needs to watch developments and get on when it is being noticed, has good management and in an area of demand.

Just missed a good one that in the past I'd have been on. 18 months ago I changed my phone plan to Kogan. It proved excellent and today on a 12 month forward plan I have unlimited phone calls and texts plus 16 gigs for my computer which hot spots off the phone. I use my computer a fair bit but usually on use 60%. Cost is a mere $21.50 a month, so much for the phone landlines. In fact just having a phone connected without use is over $30 a month.

When I first went onto their phone connection 18 months ago their share price (KGN) was $1.50, today, excuse me all ................its $9.40

Until jogged by someone yesterday I had never dreamed or thought of them being listed yet with other things happening could see they were good and locally based in Melbourne. Now for someone who did his first trade in 1967 I feel a real dope.

Having said that I was early on NST and of late love MOY and a possible silver play down the track MRV. But then my preoccupation with precious metals could be my blind spot.

This looks like a good thread.

 

[So_Cynical]

During the mining bust of 2 -3 years ago about 3 dozen micro caps either went under or were reverses takeover-ed, many many ASX microcaps are explorers, wannabe mining company's with some leases and some money, many of today's micro tech stocks used to be explorers.

To successfully stock pick micros you have to separate the stocks that genuinely have something from the ones that dont..