PRECISELY! Most money managers and fund managers are limited by what they can purchase either by stock price, or even more so, by market cap. These restrictions force them to focus on stocks that may have metrics that are not nearly as good as the micro cap stocks.
Additionally, these limitations, result in too many eyes focused on too few stocks as they all want to turn in "THE BEST PERFORMANCE" quarter over quarter --- so they copy one another and follow one another's trades like school kids peeking over the shoulders of their classmates to make sure they have the correct answer.
There's something like 18,000 publicly traded companies in the US and about half of them are micro-cap companies that institutions shy away from until their price and liquidity increase.
For decades I've spoken with brokers and most tell me their firms don't even allow them to look at the quotes on micro caps - they're verboten. When I point to the stocks in my portfolio and tell them to pull up a chart --- THEY ARE BLOWN AWAY.
I wish I would have held my AMNF -- PINK SHEET STOCK -- shares that I purchased in the .60s . It would be yielding me a divy = to 16% today on the current .10 per share dividends they are paying -- not to mention the 5x capital appreciation.
But no -- when I sold them around $2.25 ish I thought it would pull back and I would get back in --- NEVER HAPPENED.
It's easier for rich man to go through the eye of needle than it is for a camel to get into heaven.
