Last week I wrote a guest blog post for MarketClub Trader’s Blog on INO.com. The blog post titled Buy and Hold Investing Is Dead: Why Small Caps Work for Active Traders discusses the end of “buy and hold” investing, and how active traders and longer-term investors alike can profit by investing in and trading small-cap stocks.

This is a secular bear market, and investors who want to be successful need to buy and sell stocks, not buy and hold. Check out my guest blog post on the MarketClub Trader’s Blog by clicking here now.

Green Mountain Coffee Roasters (Nasdaq: GMCR) was the subject of my recent September 7 Investing in Vermont column in the Burlington Free Press. My article titled Green Mountain Coffee shares due for pullback discusses the major growth achievements of the Vermont-based coffee company (click here to read the column).

My column also discussed some of the recent insider selling of the stock, and dilutive plans for a $320 million equity financing through the sale of up to 4 million new shares of the company’s stock. With management selling their stock and issuing new shares near an all-time high for Green Mountain Coffee shares, I think investors will be best served waiting for a pullback in price before buying the stock.

However, Green Mountain Coffee Roasters is a classic small cap growth stock success story. Every small-cap investor seeks out promising growth-oriented companies that are on the verge of rapid growth. Lets take a closer look at Green Mountain Coffee Roasters.

The company was founded in 1981 as a small cafe in rural Vermont. Demand for the company’s coffee was strong, and Green Mountain began selling coffee to local restaurants and inns. Twelve years later, the company made its debut on the Nasdaq with an Initial Public Offering. And since 1993, the rapid growth of the company has been fueled by strong demand for its products, and a series of acquisitions including Keurig (makers of the single cup brewing system) and Tully’s.

Green Mountain Coffee Roasters has grown its sales from $22.1 million in 1993 to $500 million in 2008, an impressive increase of 25% per year. Just as impressive is the rise in the company’s profits, which have grown from a $2 million loss to $22.2 million during the same period of time.

The growth of the company’s sales and profits was similarly matched by a rapidly rising share price. Shares of Green Mountain Coffee Roasters (Nasdaq: GMCR) debuted at a split adjusted price of $1.61 in October 1993. While the stock languished for the first eight years, in the early part of this decade, the price began to rise, and have recently soared as high as $70.

In the last five years, the stock has risen an impressive 1,224%, turning an investment of $5,000 into $61,200.

Why has the stock risen so rapidly in recent years? The reason is the impressive financial performance of the company. Over the long-term, the performance of a company’s share price is highly correlated to the financial growth of a company’s sales and profits. For example, during the same period of the significant rise in Green Mountain’s share price, the company’s sales have increased from $138 million in 2004 to an estimated $798 million in 2009.

In chapter 3 of The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks, I’ll show you how to find great small-cap stocks in the early stages of their growth phase, when their shares remain relatively inexpensive. And in chapter 4 I’ll show you how to use financial statements to find the early signs that future growth is just around the corner. You can learn more about The Small-Cap Investor by clicking here.

By reading The Small-Cap Investor, I hope I can help you find some big winners like Green Mountain Coffee Roasters for your portfolio.

It is official. My book was released today by publisher John Wiley & Sons. The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks is now available through all the major online booksellers and in selected bookstores throughout the country.

Please help spread the word about The Small-Cap Investor. I hope you enjoy reading, and find the information and strategies to be informative and profitable for your investment portfolio.

Last week I picked up another endorsement, this one from Jon Ogg, founder of 247WallSt.com. I had sent Jon an advance release copy of The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks, and he was kind enough to provide a warm endorsement for my book. Here it is.

“The Small-Cap Investor is a very impressive look into the world of evaluating small-cap stocks for newbies and sophisticated investors alike.  The quick hitting base of knowledge in here will invigorate, or re-invigorate, some of the discipline that investors frequently forget or take exception to.  This has dozens of bits to keep investors from saying ‘I should have…’ and gives key signs for how to avoid getting suckered by empty story stocks versus those with real promise.”
- Jon C. Ogg, 247WallSt.com

Thanks Jon!

I just got a new endorsement from Zacks Investment Research. Pleased to be getting some great feedback from the investment experts who have reviewed an advance release copy of The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks.

“History has proven that investors are best off with a healthy dose of small-cap stocks. The key is to find the ones with the best earnings prospects and be sure to own enough of them to diversify away the risk. There are few investors who understand this strategy better than Ian Wyatt and you would be wise to heed his advice.”
- Stephen Reitmeister, Executive Vice President, Zacks Investment Research