Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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.

Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Hank Stamper who wrote (1689)	10/17/1998 3:16:00 PM
From: Kirk ©	Read Replies (1) \| Respond to of 15132

What environmental change must take place before the situation changes from 'depressed prices' to 'buying opportunity' in small caps? Recession? Really? Interesting you ask that! I just posted that question: "For the year, the DOW, S&P500 and Nasdaq are up 6.4%, 8.9% and 3.2% respectively. Exceptional value remains in the Russell 2000 index which is down 21.5% for the year. The big question for investors is "when will money start to flow from the favorite large cap stocks and into smaller capitalization stocks that compose the Russell 2000 Small Cap Index?" (full article at suite101.com ) Maybe the small caps will have to start paying out dividends once they are stuck in p/e range of 7? Or... just stay at a p/e of 7 and continue to grow faster than large caps and use earnings growth to outperform. Maybe the variable that needs to change is indexing? When all the stock market money is in the 500 largest companies, then numbers 501 to infinity will be worth nothing and have a p/e of near zero. Expand the argument to the Wilshire 5000 if you like. I don't see an easy answer but the corner dry cleaner might make the owners very rich relative to the neighborhood, but you probably won't see 20th Century Ultra or Fido Magellan buying the little mom n pop shop or the shop making it into the Wilshire5000. Amazing the discrepency between the Russell2000 and the S&P500