Re: Is the Small Cap Premium a Myth?
Intuitively, it makes sense to me. Large institutional investors have too much money to invest in small caps. This stable money probably keeps the large caps values more stable as well as limiting their returns since more people are chasing them.
Small caps, because they are small, also have more headroom to grow. Every once in a while, one of those little companies is going to blow up and become a large cap. Its a lot easier for a $500 million company to double in market cap, than it is for a $10 billion company.
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