Small Cap Value Report (4 Dec 2015) - ESCH, IMO, BRY

Good morning!It really feels as if we're dodging bullets left, right, and centre at the moment. Not only are many/most small caps expensive, but there seem to be lots of profit warnings happening too. This certainly makes me nervous, and more prone to cut positions where I don't have strong conviction, and a positive recent trading update - or solid reasons to expect positive trading.Certainly the market is being brutal with anything where there is any hint of trouble, so it's not a time to be holding things that are based on hope over substance in my view.Although in most cases, profit warnings don't actually come out of the blue. Usually common sense can allow you to steer clear of problem companies, and problem sectors. The previous trading update can often contain clues to a forthcoming profit warning (e.g. we expect an H2 weighted year, or we expect to close large contracts by the year end, etc), and often broker forecasts have been trimmed in advance of the profit warning, as the company gave a steer to analysts as it becomes increasingly clear they are likely to miss forecasts. So it pays to look for these signs, and act on...