SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 156.25-1.0%1:11 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Jordan Levitt who wrote (113140)2/13/2002 11:38:14 AM
From: Art Bechhoefer  Read Replies (1) of 152472
 
Jordan, I think you have hit on a key factor; namely, that smaller cap companies are not only more difficult to analyze but that large institutional investors can't devote much time to a company that is so small that a major investment would affect the stock price.

Berkshire Hathaway still asks shareholders for ideas on companies worth considering. Many years ago, Berkshire still looked at companies with caps under $100 million. Now even $10 billion seems on the small side for Berkshire.

There are about 500 really large mutual and pension funds that face the same predicament. They can't invest in small companies because doing so would affect market prices for those companies and also place fund holdings at risk if they had to sell in a hurry. The efficient market theory works best when one limits the market to stocks followed by the largest funds. In effect, these funds ARE the market (individual holdings are relatively small, except in cases like Microsoft).

Precisely because smaller cap stocks are less influenced by investment decisions of large funds, the smaller caps may offer a better return to individual investors at modest risk levels. QUALCOMM, while it is now well above the typical definition for small caps (less than $1 billion market value), is still not much of a favorite of investment funds, making it possible for individual investors to get a better return than from a similar, but larger company (e.g., Motorola, Nokia).

Art
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News