Thursday, April 19, 2007

Small caps at a premium?

Here's something for you to consider: does the "size effect" still give small cap stocks a performance advantage over large cap stocks?

That's the question posed by James Montier in a piece highlighted by John Mauldin's "Outside The Box" e-letter.

In, "Meaty Beaty Big and Bouncy", Montier examines the small cap effect and finds the performance advantage lacking in recent years.

To hear why the small cap size effect should be considered more of a "value effect", read on at the link above.