Small caps best since the Nov election. Why?

[P.S.]

Quote:

Originally Posted by copyright1997reloaded ... This is not "efficient market" behavior. It is behavior based on speculation, rumors, pumping of stocks in Twitter and on Discord servers. It is a market of emotion.

I can guess what “should” be the long term expected results from following this. Nonetheless, the above process is what I used for GME and BB purchases, after having followed WSB for almost 2y, those were my first “plays.” Yes, it was probably a lotta luck, and probably a not insignificant amount of dumb. I would also say it was “work” being glued to a screen for about 100h.
My completely uneducated guess is that in 20y, looking back, a strong argument could be made for the factor of “retail”: social media, the globalization and access of retail sentiment, TikTok... what makes people tick.
Because what are company fundamentals based on? First the consumer does the actual buying/spending/consuming... then you throw it into the black box of a company’s financials... then out pops the info to analyze. Maybe the sentiment analysis will be legitimized only when algorithm-ized, and until then, those who utilize it will have an advantage.

[sengsational]

Looking at the 26 year history makes me think it's finally time for small cap value to recover from it's lackluster last many years.

[Lsbcal]

Quote:

Originally Posted by sengsational Looking at the 26 year history makes me think it's finally time for small cap value to recover from it's lackluster last many years.

That would be my guess too. But I tend to a structured approach to following trends rather then just guessing. Still cannot wring out all the risks in owning equities ... drat.

[Montecfo]

Small caps have been a staple of my investing for years. I think they have gotten cheap enough on a relative basis to be bought.

And as we can see there is some rotation out of large caps. This is to be expected.

In the short term, the market is a voting machine. In the long term it is a weighing machine, to paraphrase the great Ben Graham.

[Lsbcal]

The trends continue. This is a very unusual historic period as the Covid effect on economies is dominating. My guess is that we have this scenario:

1) DONE: growth stocks take off in lockdown
2) ON GOING: value stocks take off as vaccines start appearing and recovery anticipated
3) FUTURE: foreign developed country stocks take off when those countries (Japan, UK, EU) start getting better vaccine supplies

YTD performance through March 14, Vanguard funds:

Large growth = 1%
Large value = 11%

Small growth = 6%
Small value = 21%

Large International = 5%
Small International = 3%

[NW-Bound]

Quote:

Originally Posted by copyright1997reloaded ... It is NOT random, it is psychological behavior of humans. ... This is not "efficient market" behavior. It is behavior based on speculation, rumors, pumping of stocks in Twitter and on Discord servers. It is a market of emotion.

Well, human behavior, particularly that of crowd, can be random too, and hard to predict. You cannot tell when a herd starts to stampede.

But while there's crazy stuff going on with Redditors, I believe there's sector rotation, where investors start to pick up neglected stocks and to take profits from the FAANG stocks and large cap stocks. This is healthy in my view, and of course having no FAANG stocks, I welcome this move.

[Markola]

Wow, I literally had not noticed until this thread that my extended market index fund is up 108% since April 1, when it started steadily rebounding. Half of that growth happened prior to the election and half afterward, so I see no correlation at all to Nov. 3rd.

[copyright1997reloaded]

Quote:

Originally Posted by Markola Wow, I literally had not noticed until this thread that my extended market index fund is up 108% since April 1, when it started steadily rebounding. Half of that growth happened prior to the election and half afterward, so I see no correlation at all to Nov. 3rd.

You should be comparing its performance against large cap or FAANG or even total market. That is, what is doing relatively better and relatively worse. If all one wants to do is map to the overall market, BUY THE OVERALL MARKET.

But here in "Stock Picking and Market Strategy" land of the ER.org misfits (because we aren't just "buy the passive index tracking fund and get on with your life"), we should want to know/go for relative outperformance, either via sector/stock picking or (shudder) market timing activities.

[Lsbcal]

Quote:

Originally Posted by copyright1997reloaded You should be comparing its performance against large cap or FAANG or even total market. That is, what is doing relatively better and relatively worse. If all one wants to do is map to the overall market, BUY THE OVERALL MARKET. But here in "Stock Picking and Market Strategy" land of the ER.org misfits (because we aren't just "buy the passive index tracking fund and get on with your life"), we should want to know/go for relative outperformance, either via sector/stock picking or (shudder) market timing activities.

Hmmm...I am in some sympathy with your comments. But really what is the profile for a model portfolio? If you are steeped in Boglehead thinking you would have one answer ... well maybe many answers around a general theme. If you are a Wall Street type you would have different answers. OK, I know you were kidding about "misfits" but I just want to make the point that there is no neutral standard portfolio model for US investors. Looking for agreement is fruitless.

FWIW, I just like to make my portfolio perform well and if I can beat the market great. In crass terms it's all about making lots of $'s.

Now I will step off my soapbox.

[Markola]

Quote:

Originally Posted by copyright1997reloaded You should be comparing its performance against large cap or FAANG or even total market. That is, what is doing relatively better and relatively worse. If all one wants to do is map to the overall market, BUY THE OVERALL MARKET. But here in "Stock Picking and Market Strategy" land of the ER.org misfits (because we aren't just "buy the passive index tracking fund and get on with your life"), we should want to know/go for relative outperformance, either via sector/stock picking or (shudder) market timing activities.

There are a lot of roads to Rome and YMMV but we aren’t personally in the stock picking/market timing camp. Rather, we are buy and hold types and have our equity allocation in 3 Vanguard index funds: Total U.S., Total International and a small allocation to Extended Market, which is what allowed me to compare the small cap outperformance of late. Good luck.

[explanade]

VSGAX didn't pay a dividend in Q1 2022, the first time I can remember it or any other fund not paying.

I've held it for about 10 years.

Anyone else notice or have held other funds which didn't pay a quarter here or there?

[Lsbcal]

I noticed that too just because I get data for the various asset class funds.