Graycell Small Cap Portfolio

Quantitative Portfolio Targeting Small Caps

The Secret of Getting Ahead is Getting Started ... Mark Twain

2018 (Feb 1)    :     GA SMALL CAP  + 10%         RUSSELL 2000  + 3%
2017                :     GA SMALL CAP  + 37%        RUSSELL 2000  + 14%
2016                :     GA SMALL CAP  + 71%        RUSSELL 2000  + 19%

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The Graycell Small Cap Portfolio focuses on the universe of stocks from $200 million to $3 billion in market capitalization. The portfolio investment focus is to participate in the early stages of the growth of a company while diversifying sufficiently across a market cap range that includes even early stage midcap or SMID companies. The return objective of the quantitative model driven portfolio is to outperform the Russell 2000 by at least 5% points over a 12-month period. As you will observe from the long history, the model portfolio performance has surpassed its objective quite convincingly. The model portfolio comprises up to 10 stocks, which are nearly equally-weighted.

  • The Enduring Power of Small Cap Stocks
    Plus, The Power of Compounding
    Growth of a Single Dollar Since 1926

Graycell Advisors ~ Small Cap and Large Cap Performance - 1926 to 2016 ~ Morningstar

$1 Invested In Different Market Instruments From 1926 - 2016 ~ Source: MorningStar / Ibbotson Associates

$1 Invested from 1926 to 2016 ~ Source: Morningstar

  • Investment Focus

    The Small Cap Model Portfolio Newsletter focuses on young and emerging companies.

    Small cap stocks are typically more risky, in terms of measures of dispersion like standard deviation or volatility, than larger-cap stocks. The risk in this segment is a combination of many factors including relatively less liquidity or volume of shares traded, lesser research-coverage compared to their larger cap peers, greater sensitivity to unconfirmed market rumors or hearsay, and less well capitalized along with relatively limited access to financing options. However, the greatest opportunities for capital appreciation also lie in the small cap and early stage midcap stocks, principally because of their undiscovered nature. The key is to manage down the risk, since it can’t be eliminated, and find a balanced blend of risk and reward for that asset class. Our philosophy and systematic investing approach apply to all our products.

    Small caps are generally defined as stocks with a market capitalization (market cap) between $200 million and $2 billion. We believe a wider investing definition that includes SMID or smaller midcap companies, which are relatively more stable, can contribute towards managing down risk and enhancing risk-adjusted returns. Consequently, the Graycell Small Cap Model Portfolio has a targeted market cap range of $200 million to $3 billion.

    The focus for the model portfolio is on generating consistent and strong returns, and we achieve that through our highly disciplined approach to investing. It’s a multi-dimensional approach combining a number of aspects including process-orientation, market direction analysis, and experience-and-rules-driven quantitative modeling and using fundamental and technical variables.

    Delivering strong annual returns exceeding benchmark, will be considered quite satisfactory to many investors. However, overlaid on this investing approach is our belief in the Power of Compounding. It is this blend of strong returns further powered by compounding that delivers incredible portfolio growth over the long-term. Investors must use the enduring power of the markets and the magic of compounding to build long term wealth.

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A pick from the small cap portfolio delivered to your mailbox for the next 12 months

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  • Performance


    The Graycell Small Cap Model Portfolio was first offered in 2003 as a weekly newsletter. It was available for 7-years till 2009, and was then resumed in 2012 for 4 years till 2015. Since 2016, the portfolio is offered as a monthly newsletter service.

    Over the 11-year period, the Small Cap Portfolio  strongly outperformed the market in all years except one. In addition, the portfolio gained consistently each year.

    The statistics below show the performance of model portfolio holdings published over the period, and not back-tested performance. All returns are based on cash equity, and no margin or any form of leverage is used in any of the model portfolios.

    The performance is considered hypothetical, since actual trades were not executed in an audited account, and is presented for illustrative purposes only. No representation is being made that a subscriber will or is likely to achieve profits or losses similar to those shown. Past performance is not indicative of future results, which may vary.

2017 Monthly Performance

Graycell Small Cap - Monthly Performance 2017 ~ Graycell Advisors

2016-17 Cumulative Monthly Performance

Graycell Small Cap Performance Vs Russell 2000 Index ~ 2016, 2017 ~ Graycell Advisors

2016 Monthly Performance

Small Cap Performance 2016 ~ Graycell Advisors

2003 to 2016 Cumulative Performance

Small Cap Performance 2003 - 2016 ~ Graycell Advisors

2003 to 2016 Annual Performance

Small Cap Performance 2003 - 2016 ~ Graycell Advisors
Small Cap Performance 2012 - 2016 ~ Graycell Advisors

Building Investment Wealth Over Time...

a journey from $10,000 to over $2.1 million

$10,000 Investment - 2003 - 2016 ~ Graycell Advisors
  • Investment Characteristics


    • High Risk and High Reward product
    • Generally appropriate for younger investors who are in their twenties to forties with a long-term focus, who decide to allocate a portion of their portfolio to higher risk opportunities
    • Investors who are in their early fifties should generally consider a relatively smaller allocation to riskier products targeting small cap stocks, while older investors need to determine if small cap sector exposure is beneficial to their investment plans
    • An investor must have at least a 2-3 year horizon to benefit from such systematic portfolio products with an outlook to build investment wealth over time. The most important thing is to have reasonable and realistic expectations from the stock market, which is a risk-reward and not a risk-free market. The small cap portfolio is not insulated against losses, and we can try to manage risk but not eliminate it. Past performance is not indicative of future results.
    • We share our model portfolio through the newsletter subscription but are in no position to comment on the suitability of the product relative to your needs, risk tolerance and financial position. Always consult your professional financial advisor. We are not registered representatives.
  • What Do I Get From The Subscription?

What you get is the Graycell Small Cap Model Portfolio with a complete investing game plan behind it. An investing plan, which has outperformed benchmarks over an entire economic cycle.

Each month when the Graycell Small Cap Portfolio newsletter is available to you, the portfolio you access is not just names of up to 10-stocks. This portfolio of 10-stocks represents an investment game plan driven by quantitative models. Based on your determination of the relevance of this information to your situation, you will now have the ability to use a systematic investing approach to invest in the market.

  • Benefit 1 - A systematic investing approach to follow monthly
  • Benefit 2 - A game plan to follow a quantitative investment strategy
  • Benefit 3 - An emotionless investing system that avoids the judgment risks of experts and humans
  • Benefit 4 - Exposure to the promising names within the high potential smallcap segment
  • Benefit 5 - A diversified portfolio to manage a portion of the stock-specific risk
  • Benefit 6 - Limit risk from prolonged adverse market conditions by knowing when to be in Cash
  • Benefit 7 - Clear cut suggestions, simple to understand and follow once a month
  • Benefit 8 - No daily decision-making or spending endless hours reading research and remaining undecided
  • Benefit 9 - Once you determine the information is relevant, just follow the portfolio once-a-month
  • Benefit 10 - Instant access to a quantitative model, for a price of ~$30/month that is less than a dinner check
  • Building Investment Wealth Over Time...


"The Best Time to Plant an Oak was 20 Years Ago.
The Next Best Time is Now..."

How powerful is this old English proverb. You've to start somewhere, sometime.
There is no guarantee of future performance. Nonetheless, it should still be noted that various studies and scholars have provided empirical evidence that bolsters the thesis that systems outsmart individuals consistently. We hope you read our section on Systematic Investing that underlies our approach across all newsletters.

If you feel our system can help grow your portfolio wealth over time, then don't wait!

The Decision is Yours Now!

We leave you with a quote from Warren Buffett,

Warren Buffett

While there is no one best system, there is one that works best for you. Once you choose a system, you need to stick with it.

Warren Buffett, Legendary Investor

Buffett made the above comment while referring to the card game of Bridge. But his words hold a vital truth for Investing as well.

Thanks for reading, and Good Luck!

We wanted to express our thanks. The newsletter reduces all our investing work, and I can never claim to have performed so well in the markets before with much less effort and stress. Thanks for putting a spark in our stock investments.

Roxanne and Albert Weinstein, California

My investing has benefited a lot. I'd come to your site after reading about you in Seeking Alpha. But I was a skeptic since I've been burnt many times using all kinds of programs. Thankfully, the results converted me. I don't have to constantly keep tracking my portfolio.

Chad Barthow, New Jersey
  • Pricing

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      4. Volatility. Smallcap sector is highly volatile. Significant monthly volatility should be expected based on market conditions. There is significant risk from one-sector exposure, as would be true for any sector focused portfolio or fund. A concentrated portfolio of 8-holdings will have greater up-and-down volatility then a same sector index or fund with many more securities.

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      Graycell Advisors, and its affiliates, officers, employees, families, and all other related parties, collectively referred to as ‘Graycell’ and/or ‘we,’ is a publisher of financial information, such as the Smallcap, and Prudent Biotech newsletters. We are not a Registered Investment Advisor (RIA). Historical performance figures provided are hypothetical and unaudited, and based on our proprietary analysis and system performance, back-tested over an extended period of time. Hypothetical or simulated performance results have limitations, and unlike an actual performance record, simulated results do not represent actual trading and consequently do not involve financial risk of actual trading. The performance results obtained are intended for illustrative purposes only. No representation is being made that an account will or is likely to achieve profit or losses similar to those shown. Past performance is not indicative of future results, which may vary. All stock and related investments have a degree of risk, which can result in a significant or total loss. In addition, biotech sector and smallcaps are characterized by much higher risk and volatility than the general stock market. Information contained herein is general and does not constitute a personal recommendation or takes into account the particular investment objectives, financial situations, or needs of individual investors. If you decide to invest in any of the stocks of the companies mentioned in the newsletters, samples, alerts, etc., sent to you or available on our websites, you can and may lose some or all of your investment. You alone are responsible for your investment decisions. Use of the information herein is at one's own risk. We are simply sharing the results of our model. Nothing should be construed as a recommendation or an offer to buy or sell any securities, and we are not liable nor do we assume any liability or responsibility for losses incurred as a result of any information provided or not provided or not made available in a timely manner, herein or on our website or using any other medium. We cannot guarantee the accuracy and completeness of any information furnished by us. We may or may not have existing positions in the stocks mentioned in our reports. Our models are proprietary and/or licensed, and can be changed or revised based on our discretion at any time without any notification. Subscribers and investors should always conduct their own due diligence with any potential investment, and consider obtaining professional advice before making an investment decision.
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