Sentences with phrase «outperformance of small cap stocks»
For one, if you look at interim periods, the outperformance of small cap stocks is not so clear.
http://www.mindfullyinvesting.com/ Not exact matches
Digging further into the outperformance of HML SMALL during this period, the study's authors note that the HML alpha can be tied more to horrible performance by the low - value small cap stocks for the period instead of great performance by the high - value stocks.
More importantly, the outperformance of value stocks relative to growth stocks is significantly larger for the strategies executed in small - cap stocks.
On the efficiency side of the debate, the outperformance is generally explained by the excess risk that value and small - cap stocks face as a result of their higher cost of capital and greater business risk.
Based on the historical back and forth of small and large cap performance, Bogel questions whether the evidence of consistent and long - term outperformance of one size of stock over another is real, and more importantly predictable for the future.
Value stocks» outperformance is even more pronounced for small and mid cap companies, because they tend to trade at even bigger discounts due to illiquidity and lack of analyst coverage, as well as being able to achieve higher growth rates than larger companies.
Some investors argue that the historical outperformance of small - cap and value stocks is (mostly) a market inefficiency that we shouldn't expect to persist now that it's so well known.
Wes thinks that the outperformance of the Magic Formula is due to small cap stocks, which he tests in a second post «Magic Formula and Small Caps — The Missing Link?&rsmall cap stocks, which he tests in a second post «Magic Formula and Small Caps — The Missing Link?&rSmall Caps — The Missing Link?»
So the Magic Formula generates alpha, and beats the market globally, but not by as much as Greenblatt found originally, and much of the outperformance may be due to small cap stocks.
International small cap active managers that target companies with positive earnings may benefit from the historical outperformance of these stocks
For these small - cap stocks I have a fixed holding period of 5 years because that seems to be the time horizon over which the most outperformance can be had for the smallest amount of effort.
In 1992, the Fama - French three factor model (market risk, size and value) found that both the size (small vs large cap) and book - to - market equity (value vs growth) factors deliver a higher risk - adjusted return in NYSE stocks, and thus the model adjusts for the outperformance of size and value when valuing a stock.