Beating Wall Street with Common Sense: How I Achieved a 400% Return from my Dorm Room

by Wayne Duggan

While market cap is a useful tool in determining the approximate size of a company, the “value” that market cap represents is always wrong. What do I mean by that? Every uptick and downtick of share price changes the market cap of a company slightly, so the market cap of a large company like AAPL changes thousands of times every day! In fact, an investor needs the market cap to be “wrong” or he will never make any money. When you make a bet that a company’s share price will rise, you are also making a bet that the current market cap is too low. This is an extremely important point, and I would not recommend buying a single share until you understand this idea.