Sep

28

A popular talking point on CNBC is currently the rotation out of smallcaps into largecaps or how largecaps will now outperform smallcaps, but is it fruitful to think in such terms? Certainly smallcaps are more risky because of trading liquidity and various business risks such as lack of diversification and huge leverage, but if a company can grow in excess of 15% a year should the long term not outweigh the short? It seems the media has found a new talking point which is causing panics in various smallcap issues. I wonder if the old men are taking the canes out and buying merchandise on the cheap, or have the goods indeed spoiled?


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