4 ms·
The small cap edge is surprising.
by tiahura 1y ago
The small cap edge is surprising.
- default-kramer 1y agoAnd it's not obvious thanks to the logarithmic scale... There must have been a better way to present this information.
- ArtTimeInvestor 1y agoLooks like that was a one-time event in the 70s. The rest of the time, the small stocks line goes roughly parallel to the large stocks line.
- rokobobo 1y agoRight--in log scale, the gap has stayed roughly the same until around 1980.
- BlandDuck 1y agoIn finance there is an ongoing discussion of whether the small-cap premium still exists. For technical discussions, look for the terms "SMB size factor".
- _vaporwave_ 1y agoI thought the same initially but this may just be a case of recency bias. Small caps have underperformed large cap stocks for the last ~12 years but these things tend to go in cycles: https://blogs.cfainstitute.org/investor/2025/04/24/small-caps-vs-large-caps-the-cycle-thats-about-to-turn/ https://blogs.cfainstitute.org/investor/2025/04/24/small-cap.... It will be interesting to see how the next cycle plays out with the recent concentration of returns in large cap tech stocks (Magnificent 7).