I receive a fair amount of commentary across my desk and computer with the various pundits pounding their chest as to what investment is best, what is the safest, what is defensive, etc. etc. etc.
I was reading a report today sent to me from Advisor Perspectives that back tested the last 4 recessions and how the common safety flight to "big caps" was not quite as effective as it is cracked up to be.
Advisors Perspectives: Questioning the Flight To Safety
This analysis shows that during tough times, some companies will get hurt, some will simply survive and that others will excel. The important aspect though is that on an overall basis, the true winners coming out of recession periods are the small caps that have good management teams who demonstrate the ability to be flexible.
This is exactly the situation that I discussed in the First Capital Investors, Q1 2008 edition of "The Small Cap Investor" when I featured Redux Holdings (OTC: RDXH).
At the present moment, I am unsure of what the final distribution of Naturade shares will be to Redux shareholders once the Redux assets are sold to Naturade, so there is some uncertainty there. However, once the full deal is announced, Redux definitely offers a reasonable option to small cap investors who want a company that maintains diversification, defensive positioning, downside protection, experienced management combined with a stock with upside potential.
Disclaimer: I own a lot of stock in Redux and I handle IR and Capital Markets issues for the Company for compensation. I have owned the vast majority of my shares for several years. The stock does not trade very much and I think the stock is currently "off the radar". Upon completion of the transaction with Naturade, the stock should start to see some attention as there are a number of firms that have indicated an interest, but who are just waiting for the full deal to be announced and close.
Stay tuned.
