Five Questions: Private Equity in Public Markets with Brian Chingono

By Jack Forehand (@practicalquant) —   There are many misconceptions about private equity investing. Many investors view it as a domain where the rich and institutions earn outsized returns that are not available to the average person. It is viewed as an exclusive club with huge benefits that only the elite can be part of. But at its core, private equity is just investing in companies much like public investing is. It is a bet on the… Read More

Securing Alpha From Small-Cap Stocks

  Vitali Kalesnik and Noah Beck of Research Affiliates provide a detailed analysis of how investors may be able to capture alpha in the small-cap sector.  They liken investing in small-caps to fishing in a pond where alpha is available, but the fisherman’s strategy and skill determines whether one can “reel it in.” They suggest that “small size as a standalone source of premium” is not reliable, but contend that “[e]ven if small companies are… Read More

Hulbert: Small-Cap Value Stocks May Be Ripe for Impressive Gains

Small-cap value stocks are risky but they also historically produce jaw-dropping gains at the begining of bull markets, Mark Hulbert writes in the New York Times. Referencing academic research performed by professors Eugene Fama (University of Chicago) and Kenneth French (Dartmouth), Hulbert writes that small-cap value stocks (stocks with the lowest price/book ratios) “gained 17.1 percent, on average, in the first three months following the 13 market bottoms since 1969, equivalent to an annualized rate… Read More