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Three Questions That Bruise The Small Cap Performance Promise

TedTed
in Fund Discussions
FYI: When I was in college, I worked for a retired economics professor who had taught at Oxford. I cleaned his car, mowed his lawn and washed his windows. While I labored, he asked me plenty of questions. He usually knew the answers but he liked to see me squirm. And his follow ups were irritating. He asked, “Are you sure? How do you know? And does it really work like that?”
If he had asked me if small stocks outperformed large stocks, I would have said yes. But he probably would have followed with his three favorite questions.
Are you sure?

Regards,
Ted
http://assetbuilder.com/andrew_hallam/three_questions_that_bruise_the_small_cap_performance_promise

Comments

  • varmint
    I hearing the public relations machine at the Fama-French mouthpiece DFA cranking up with a strident defense. With small caps, you need to be lucky to be invested in them during a time in your life when they are rising above the tide and not in them when, for long stretches, if not decades, they lag. Why deal with the violatility when you can ride a wave in large blend stocks and don't have to worry about them delisting. Small caps never made sense to me.
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