It's true that the largest of the large - cap
stocks are less overvalued today than in 2000, but even on a
capitalization - weighted basis, the difference is far
smaller than one might think once profit margins are
taken into account.
Sometimes, new fund managers will get lucky by
taking positions in
smaller firms with more volatile
stock prices, or they may pick some larger
capitalization firms whose
stocks might appreciate dramatically in the short run.