Monday, January 10, 2011

Small Caps - Continue to Position

As I have been pontificating for some time, large cap growth is not the place to be.  I have been a big proponent of mid-caps with a keen eye on small caps.  Just a snapshot of what we have seen generally across the capitalization spaces:


Having a focus on growth (instead of value, which to me does not make sense at this juncture) we see the following:


Over the last three months, small-caps have outperformed mid-caps by 200bps.  Yeah, when markets are choppy, small-caps will have more volatility, but if you are invested, continue to shift into small-caps.

Now this probably isn't news to many folks, but I feel the need to get it out there.

Interesting trade idea though might be a growth/value arb.  Long IWO, short IWN.

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About Me

A student of the markets that has held portfolio management, analysis and trading positions for over 15 years.