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Earnings season always puts me on edge. It’s a time when I get to either confirm that I'm right on my research, or confirm that I'm wrong. Of course, sometimes a company reports results that fall somewhere in between my expectations; in those cases I need to dig a bit deeper to find out how accurate I was.

But there's one thing that I hate more than anything: When I have a gut feeling about a company but don't act on it, because I haven't had the time to do the in-depth due diligence that I always do before buying (or recommending others buy) shares.

Then the company reports a blow-out quarter, and the stock soars. Nothing ticks me off more than these missed opportunities.

When I settle down (which, thankfully doesn't take too long), I go back to my research and evaluate the "missed opportunity" to see if the share price pop is the beginning of a new trend, a continuation of an established trend, or the blow-off top which signals that a downturn is imminent.

Since I'm a long-term investor, what I really care about is where a stock will go over at least the next six months; more realistically, I invest with closer to a two-year time horizon.

It's important to remember that unless you buy a stock on its IPO date, there is always a previous history to the stock. If investors just look at where the stock has been, and never look to the future, then they will always be kicking themselves for missing out on gains.

I hear this sentiment from readers who occasionally question a recommendation for a stock that has risen 100 percent or so over the past year. My response is always the same: I care more about where a stock is going than where it's been.

With this perspective, and the fact that I'm looking for stocks that are set to soar hundreds of percentage points after I recommend them, even a one-day pop in shares usually doesn't nullify my investment thesis.

But I still hate missing those gains.

A couple days ago, I featured the following chart of Sam Stovall's S&P Guide to Sector Rotation. The below image is courtesy of

Legend: Market Cycle | Economic Cycle

Right now, the consensus is that we are in the early to middle stages of the economic recovery. Certainly the market thinks we're in the mid-to-early stages, and that's from where I take my direction.

And that means that we need to look to the right sectors to take advantage of the current market cycle. This cyclical rotation guide is saying that from early economic recovery to full economic recovery, the market is in bull mode. That's where we are right now.

Right now, the market still favors technology and energy stocks. One company that's been on my watch list that is in both sectors is Exide Technologies (XIDE), a company that manufactures lead-acid batteries.

The performance of companies in the energy storage sector improved in late 2010, and recently got a small boost from President Obama's comments in his State of the Union Address. The President called for further investments in alternative energy, and increased use of hybrid and electric vehicles.

In this arena Exide Technologies is on the top of my list, since the industrial battery manufacturer's diverse revenue stream from global operations provides a platform for future growth.

One of these key growth drivers will be automobile manufacturers' installing stop-start idle elimination systems. These will allow vehicles to turn off while not moving, and lead-acid batteries from companies like Exide will make it happen.

Sales at the end of the most recent quarter increased 5.7 percent year-over-year, and net income increased to $13.9 million, or $0.17 per share, as compared to $3.8 million, or $0.05 per share, in the year earlier quarter.

Analysts expect sales to grow at a steady clip around 5.5% over the next year, and for earnings per share to increase by an attractive 46%. A consensus price target of $11.50 indicates the stock has around 17 percent upside from current levels.

If you just look at XIDE's past stock price performance, you'll be kicking yourself for not buying shares in September 2010. Since then the stock has doubled. But that's no way to invest.

You should listen to the market, take your direction from what it is telling you, and buy the companies that you believe have the potential to keep soaring. That's how you'll make money in small caps -- simply the best performing asset class over the long term.

And that's how you'll already be in stocks the next time management reports. I can tell you from experience, it's a lot easier to stomach the "missed opportunities" when you have a healthy mix of current opportunities -- those that you own shares in when they pop.

Further Reading: Small Cap Investor PRO lead analyst Tyler Laundon and I recently added two oil and gas exploration stocks to the portfolio to take advantage of the market's sector rotation. Since our original recommendation, these stocks are up 10 percent and 30 percent -- and we believe they have much more room to go as the market completes its sector rotation.