Why I'm Not Buying Small Cap Stocks Right Now

I've heard from a lot of people asking me why I'm not jumping in to small cap stocks. Right now, the valuations in small cap stocks are much more favorable. If you look at the 2000 or so stocks that make up the Russell 2000, somewhere around 40% of them are not profitable. That's if you use a gap type standard of profitability and pretty much nobody uses that anymore.