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Yet Another Stellar Year For Smallcaps
Apr 1, 2017

For the third time in the past five years, smallcap stocks outperformed their larger peers by a wide margin. Now, one year is too short a time frame to measure the true return potential from small caps. More often than not, these quick gains are backed by speculation and aren't sustainable. We typically recommend to buy small caps with at least a three to five-year perspective.

But having said that, the proportion of solid small caps with massive fundamental upside is about 14-15% of the index. Zeroing-in on them requires skill in valuing the businesses, experience in judging small-cap managements, and the guts to say 'no' 85% of the time.

Hidden Treasure owes its massive outperformance to the smallcap index to these.

Data Source: BSE

This Chart Of The Day was published in The 5 Minute WrapUp - An Unusually Good Year for Small Caps

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