“So, what’s a good investment right now?”
I’m at a 6 year old birthday party yesterday when I hear this. I’m talking to one of the other dads.
We are almost cringing from the howling and racket of way too many excited rug rats running around.
I’d just mentioned I worked around the stock market. Then he springs that question on me.
For a moment, I’m stumped!
You see…
The problem isn’t coming up with a good investment idea. The problem is there are too many!
You could be looking at gold miners. You can be looking at housing shares. You can be looking at US stocks. You can be looking at crypto.
All of them come with different risks…different upsides…different timelines.
How do you even answer all this, especially surrounded by flying potato chips and games of laser tag?
I searched for an answer.
“Well,” I said. “I have a report coming out later this week. That has my five best small cap ideas right now.”
The inevitable response came.
“What’s a small cap?”
Good question. Stock market types often mention terms like “blue chips”, “small caps”, “microcaps” and all the industry jargon.
It’s double dutch to a lot of people.
I got a taste of this medicine in a different context, ordering a new door for my house the other day.
The sales rep threw so many acronyms and terms at me I didn’t have a clue what she was jibbering on about.
A door is a door to me. You walk through it, and open and close it. Maybe lock it from time to time. What else is there to know? Much more, apparently!
(I’m no tradie or home renovator, as you can no doubt guess).
By a small cap, I mean a stock outside the Top 200 firms, in terms of size, on the ASX.
There can be big “alpha” here. Oops…there I go again.
You can make a great return in excess of the general market.
Of course, each share comes with unique risks, and a potential loss of money too. We can’t be blasé about all this.
But the upside can be so good you’re mad not to at least consider some ideas here.
Do look at this feedback I received the other day from a paid subscriber of mine…
“Hello just a word on my experience, I have made money on Callum’s hard work every year since joining his service, I enjoy the research and have had many winners along the way, I recently took his advice to buy the dip and picked up Development [sic] group on the big dip in early April, up a nice 170% and counting. Callum had been screaming from the rooftops about how good a deal they were and once again he was on the money. Have nothing but respect for knowledge in the small cap space. Thanks Callum.”
What a great letter to receive! There were a bunch of others. But I point it out because it mentions one of my recommendations, Develop Global ($DVP).
This has been almost the perfect small cap idea in 2025.
A known entrepreneur runs it (Bill Beament). It has a strong tailwind behind it (the copper thematic). In January, it was cheap. It’s delivered operationally.
Net result? The share price has doubled in six months (my subscriber got an even better return braving the big sell off in April…well done him!).
If only all shares did this…we’d be laughing all the way to the bank and the beach. They don’t. But when they go right…it can be a belter for your bank account.
Now, as you can no doubt guess, it’s much harder for a Top 50 firm to double than a small cap like DVP.
Westpac ($WBC), just to pick a big stock, has a market cap (the size of the firm) of $115 billion. That’s 100x bigger than DVP.
It’s almost impossible for WBC to double in price, and certainly in such a short time frame as 6 months. It’s a mature business in a saturated market with limited size.
You can make money in WBC…but it’s very hard to hit it out of the park with a stock like this.
Small caps offer the potential for a big return…over a fast timeframe…often with a long runway to boot.
DVP, for example, can keep growing by adding more mining assets to its portfolio.
I don’t suggest you chase DVP for the fast buck now. It’s had a big run and probably needs to consolidate for a while.
That’s what my new report is about. My next favourite 5 for potential big returns. Look out for it later this week.
Tomorrow, we’ll chat more about market positioning, and why small caps as a sector are primed to fly over the next 12-24 months.
Best wishes,
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Callum Newman,
Editor, Small-Cap Systems and Australian Small-Cap Investigator
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