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Capitalization Leadership Cycle

Feb 05 2021

When “Overbought” Is Bullish

  • Feb 5, 2021

The recent months’ surge in Small Caps has been historic, and the Russell 2000 continues to register ridiculously “overbought” readings on many technical oscillators. In the short-term, that might be a cause for caution on the overall market. However (and perhaps counter-intuitively), this extreme strength cements our view that a long-term leadership cycle in Small Caps is underway. 

Dec 05 2020

Just A “Small” Beginning...

  • Dec 5, 2020

Knee-jerk contrarians are already claiming the stampede in Small Cap stocks is “too consensus” to continue in the near term. We couldn’t disagree more. In fact, we are very confident that a new multi-year Small Cap leadership cycle has kicked off.

Nov 20 2020

The Rotation Should Hardly Be A “Surprise”

  • Nov 20, 2020

Consumer Price Inflation of 1.2% for the twelve months through October remains way below the Fed’s long-time 2% objective, which is nothing new. But a first step in getting inflation to eventually run a little bit “hot” (the Fed’s new objective) is to break the long-term disinflationary psychology among consumers and investors, and that is clearly happening. In fact, based on the excellent “Inflation Surprise” Indexes published monthly by Citi, the U.S. is now the world’s inflationary hotspot!

Jul 08 2020

The “Next Big Thing” May Not Be Big

  • Jul 8, 2020

There’s one trend that’s lasted almost as long as the bull market and economic expansion and it hasn’t definitively come to an end. The current Large Cap Leadership Cycle hit the nine-year mark in April.

Jul 05 2019

Big Is Still Beautiful

  • Jul 5, 2019

The 10-year-old bull grabs most of the headlines, but its younger sibling has begun to command more respect.

Jun 07 2019

Allocation Implications Of Full Employment

  • Jun 7, 2019

While the economy’s move above its full-employment level carries reliably negative implications for profit margins, the impact on equity returns has varied greatly from cycle to cycle.

Aug 07 2014

Small Cap Premium Finally Shrinks—But Remains Historically Extreme

  • Aug 7, 2014

July’s Russell 2000 -6% rout finally deflated some of the Small Cap valuation premium we’ve been grousing about in recent years.

Jun 06 2014

Running The Math On Mega Caps

  • Jun 6, 2014

The recent move by the S&P 100 Index (OEX) above its historic March 2000 high prompted us to take a closer look at the turnaround potential of this perennially underperforming Mega Cap index. Remember, a Large Cap leadership cycle has been in force since April 2011—with the trend strengthening the last few months. What are the prospects for the biggest of the Big Caps?

Mar 05 1998

Is It Small Cap Time?

  • Mar 5, 1998

After weighing the pluses and minuses, it still looks like big cap leadership to us...small caps lacking sponsorship and liquidity at this point.