Can it get better than this!?! I’m loving life right now!
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Why Safir Anand won’t invest beyond these 5 sectors
The strategist & investor says he won’t look beyond technology, pharmaceuticals, agrochemicals, some consumer stocks and good quality private banks.Given that Sebi has recognised the importance of revisiting small and midcap stocks, is there going to be recognition and re-rating for a lot of mid and smallcap stocks now and will some flow will migrate back from largecaps and midcap to smallcaps?
Smallcaps a very exciting space for the next 8-10 years: Axis AMC
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We are seeing good opportunities in chemicals and industrial stocks, says Anupam Tiwari, Equity Fund Manager.If I look at the market right now, the non-banking part is doing much better. If everybody is optimistic about recovery and liquidity, then why is the banking end of the market suffering because if banks are suffering because everybody is bothered about the economy, then the other…
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Five largecap and midcap stocks that saw huge battering in the March selloff found a big institutional investor waiting to lap them up; HDFC Asset Management.India’s second largest fundhouse, which commands immense clout on Dalal Street thanks to its hugely experienced fund management team led by industry veteran Prashant Jain, bought over 1 crore shares each in State Bank of India,…
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We are indeed living in an interesting time. I guess the word interesting can be construed in many ways.
It is interesting indeed. The global economyis going through a down leg; a drawdown that none of us have ever seen. It is probably the worst in the century and therefore probably the worst in the history of humanity. It is synchronised and it is global and nobody knows how long it will…
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We are indeed living in an interesting time. I guess the word interesting can be construed in many ways.
It is interesting indeed. The global economyis going through a down leg; a drawdown that none of us have ever seen. It is probably the worst in the century and therefore probably the worst in the history of humanity. It is synchronised and it is global and nobody knows how long it will…
#Mrmarket #Microcaps #Largecaps #Mastermind #Invested #Traders #Brokers #Agents #Moneymanagers
https://www.instagram.com/p/B5oxBmSDcgb/?igshid=1kojngx47sini
Another boom day for #Markets today! #Largecaps #stocks zoom up!
#NSE #Nifty #BSE #Sensex gain 1.7%
#Chartoftheday
If you’re a stock investor or have kept up with capital markets over the past year or so, you may be in awe of the S&P 500’s resiliency and the V-shaped recovery that took place starting in mid-October.
If you steer outside of the mega cap space, you’ve also gotten used to relative underperformance over the past year, particularly in small caps. Over the past 2 years, the Russell 2000 is trailing the S&P 500 by just shy of 500 basis points, a break from the long-term trend of Russell outperformance.
What I intend to show is how the recent underperformance of small caps fits in with the long-term historical trend, and what we might expect in the future.
In this first chart, I took a look at small cap performance over the past 35 years relative to large caps. I used data from the Wilshire Large Cap Index and Wilshire Small Cap Index, representing the top 750 as well as the 751st through 2500th stocks by market cap, respectively.
This shows the extent to which small cap stocks have outperformed large caps by month, on a year over year basis. If small caps gained 10% from the previous year, while large caps only gained 5%, then a value of 5% (10-5) would be plotted.
Without drawing too many conclusions from a cursory glance, you can see the extent to which small caps raced out ahead of large caps in the early stages of the last three business cycles, while large caps take the wheel later on.
In fact, the patterns are remarkably similar coming out of recessions, with spikes and then diminishing returns. There’s a notable “fifth year effect” at which time small caps lag, which as you can see is no different this time around.
Breaking the data down, the December 2014 reading of -7.87% is in the 64th percentile, which is to say that large caps have outperformed by a greater margin only 36% of the time.
This doesn’t exactly scream “BUY” from a quantitative perspective, but when you get more granular and look at daily price history, the picture changes. Unfortunately this only goes back to 1999, as the data is not as complete before then.
As of January 22nd, large caps have outperformed small caps by over 9.8%, which is in the 91st percentile of all readings. On October 10th, right before stocks bottomed, large caps were leading by close to 11.5%, close to the 95th percentile.
Ever since that peak, the momentum has been shifting back to small caps. To get a picture of this momentum, I’ve highlighted the most recent bull market in isolation and applied moving averages to the spread.
As you can see, the momentum has been heading downward since the insane outperformance in 2010, however it recently formed a “Golden Cross” with the 50 and 100-day moving averages.
This is not to mention the effects of the strong dollar on large cap earnings as well as the possibility of higher interest rates, after which small caps as an asset class tend to do well over the subsequent 12 to 18 months. Also, there’s a myriad of other risks in investing which I don’t need to outline here.
But if you’re looking for a decent risk-reward in a broad theme, I believe small caps are slightly oversold relative to large caps given their history, and momentum appears to be on their side at the moment.