This will be a thread dedicated to the stocks listed on the S&P 400 midcap index (http://quote.yahoo.com/q?s=^MID&d=1y).
Why midcap? Over a long period of time, lesser capitalized stocks have outperformed larger capitalized stocks simply on the basis that a finite number of them emerge into large cap stocks. Holding onto such stocks as they mature into a large cap stocks is one strategy of investing.
A $1000 investment in the S&P 400 index from January 1992 to January 2001 would have yielded $3525, or 15.0% compounded annually. The same investment in the S&P 500 index would have yielded $3165, or 13.7% compounded annually.
A $1000 investment in the S&P 400 index from January 1992 to January 2002 would have yielded $3468, or 13.2% compounded annually. The same investment in the S&P 500 index would have yielded $2752, or 10.7% compounded annually.
Additionally, while midcap companies are established (and generally profitable) firms, a great deal of them are still out of the media spotlight. Less exposure to the public means that greater inefficiencies in the stock can be exploited.
Institutions and mutual funds have a difficult time taking positions inside smaller capitalized issues, as low liquidity affects the stock price as they try to buy or sell the company. Midcap companies are generally between 1-5 billion in captialization, which is usually the minimum size required for funds to take signifigant positions.
The thread is linked to a portfolio of certain S&P 400 stocks which are chosen based on the criteria that they will outperform the index.
The thread will focus mostly on fundamental criteria, although technical criteria will certainly be discussed as well. This is not a trading portfolio, although short-term developements in stocks may warrant short term trading.
The forum is moderated only against spammers and hypesters. Objective commentary is always welcomed, negative or positive.
Links:
S&P 400 components:
spglobal.com
S&P 400 SPDR information, MDY:
nasdaq.com
iShares S&P 400 BARRA growth information, IJK:
nasdaq.com
iShares S&P 400 BARRA value information, IJJ:
nasdaq.com
iShares S&P 400 index fund information, IJH:
nasdaq.com |
