Mark Hulbert writes in MarketWatch that “all of [the small-cap] sector’s much-vaulted historical relative strength has come at the end of December and early January,” as reflected in the monthly average outperformance of small-caps vs. large-caps 1926-2015. According to Dartmouth professor Ken French, small-caps usually hit a low around December 20, followed by the highest yields in January. The long-term outperformance by small caps is 2.2%, according to Ibbotson data. French’s day-by-day analysis suggests, however,… Read More
Joe Mezrich, strategist with Normura securities, and colleague Adam Gould have shown that three factors correspond with small-cap performance: low price-to-sales cost relative to large stocks; economic uncertainty (reflected in dispersion of earnings estimates); and expectations for economic growth (measured by treasury yields). As stated in Barron’s, small-caps should outperform “when small companies represent a good value and when investors aren’t driven to big names.” Market history since 1980 bears this out. Mezrich and… Read More
In his latest column for Seeking Alpha, Validea CEO John Reese takes a look at a strategy that has been a consistent winner even though it focuses on an area of the market — small growth stocks — known for volatility and risk.
Kenneth Fisher says to ignore those who are saying we are headed for a stock-crushing deflationary environment.
Small stocks struggled mightily compared to larger stocks in 2014, but Wells Capital’s Jim Paulsen said that signs are pointing toward a small-cap bounce-back.
Last year, small-cap stocks lagged large stocks by the widest margin since 1998, but newsletter guru Jim Oberweis says not to quit on the little guys.
The U.S. dollar has been red-hot lately, and some of the drivers behind its ascent may be in place for the longer term. That could mean good times for US small-cap stocks, Validea CEO John P. Reese writes in a recent column.
Small-cap stocks have taken a pounding in recent months, but Francis Gannon of Royce Funds recently offered some intriguing data indicating that fundamental-focused investors would be wise not to quit on smaller stocks.
Top-rated economist Francois Trahan is sounding very bullish on stocks — particularly small stocks — and the big reason is the US’s positioning relative to the rest of the world.
In his latest column for Seeking Alpha, Validea CEO John Reese lays out his case for not ditching small caps despite their weak recent performance.