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Strategies & Market Trends : Value Investing

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To: jeffbas who wrote (6262)	3/11/1999 7:06:00 PM
From: James Clarke	Read Replies (1) of 78483

Jeffrey, as for the smaller stocks, when I put on my money manager hat at work I have to buy big stocks although I think it is an absurd distinction (within reason - I am talking about the difference between a $2 billion company and a $20 billion company), but personally, think of it this way. If you are investing for the long term, what is the business worth? Period. If you're talking about a $50 million market cap, you're dealing with a perpetual discount, but if you're talking about a reasonably sized company either the market will come to its senses or you're going to get acquired in the long run. I don't lose sleep over market cap, and it is a constant fight I have at work. It all comes down to whether you are buying a stock or buying a business. I buy businesses. Though don't get me wrong, today the premium for size is huge. So if I believe that premium is irrational, what is my best strategy? Short it. i.e. buy smaller very cheap companies. JJC

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