Good morning! It's ugly out there in small caps right now - many investors feeling a lot of pain, one friend described the market as "pretty dire" right now. The three small cap indices which I follow are hitting new lows for the year today, here is a table of the falls we have seen since this year's high points in Feb-Mar - some severe falls here, so this is very much a bear market in small caps now. Which of course is when you find the bargains, so as value investors we should be getting excited rather than fearful!

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Here are the same indices over a one year period, which as you can see is grim. So if you invest entirely in small caps as I do, then you're almost certainly having a bad year so far;

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Unpleasant though it may be, this market is creating opportunities - it's in bear markets when we can buy stocks at irrationally low prices, as the market throws out the baby with the bathwater. Plenty of stocks needed to come down, as they were over-priced. However, I'm increasingly seeing good value appear, and often sellers snuffing out price rises on good news - e.g. with Norcros (LON:NXR) yesterday (and Synety (LON:SNTY) ), where in both cases a selling overhang prevented the share price rise getting very far after positive announcements. That's a buying opportunity in my opinion, as sellers only last so long - once they are gone, then the price is free to move up.

There's not much news today, so I will recap on a couple of results that I didn't have time for yesterday too.


easyHotel (LON:EZH)

Share price: 92.4p
No. shares: 62.5m
Market Cap: £57.8m

This was a recent IPO, at the end of Jun 2014. I looked at the listing particulars at the time, and was unimpressed. It's too small to have floated, and it's not clear that they have a particularly viable business model. Taking over cheap hotels & splashing a bit of orange paint around pretty much sums it up!

Trading update - for the year ended 30 Sep 2014 gives various details, but the key part says;

Trading for the year ended 30 September 2014 was in line with management's…

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