Yes, George, I accept that. It is a fact.
I am suggesting the reason the small caps have fallen by as much as they have, and relative to the large caps, is that the small caps are recognised by the market as being inferior investments --- ie they offer inferior growth prospects and, probably, inferior dividends. Their attraction is mainly to the smaller investor who is in for a quick buck. He panics in and he panics out.
In fact, I would even go so far as to suggest that, if any small cap stock had a particular merit, the large caps would have gobbled it up already!
Since they are considered as inferior investments, the small caps are, in fact, leading the bear market and not, necessarily, its reversal. Particularly the recent up-tick, which we have agreed, is not a true reversal.
Because they are cheaper, it does not mean, in my opinion, they are bargains. I would suggest, even though they are 35% cheaper than the large caps, that more money is still going into the large caps. And will continue to do so. |
