Investing in Small/Micro Cap Stocks

[Hobb]

So I've been lurking through this forum for a while, and have been pretty impressed with several different posters' analyses of whatever financial topics.

As an investor, I've mostly strayed away from small/micro cap stocks for many reasons, including:

1. UN-necessity
2. Risk
3. Poor understanding of what to look for

I am by no means a financial expert, but I like to think that I have some idea what I'm talking about when it comes to stocks. I was wondering what you guys look for when you research a smaller cap stock or a penny stock - I feel like essentially I am looking for a 1-to-1 downside (loss of principal) versus a very high ratio upside.

For example, I read a post about IMMR which I guess Sklansky presented on this forum. I haven't read the post in which he explained why to BUY IMMR, but I see that it has done very well. What, Sklansky, did you look for?

Thanks guys,

C