Wednesday, October 19, 2016

The bull case for smaller companies

The last few years, active fund managers, by and large, have been playing a lottery. Some have done well, and some haven't. In general, active fund management has suffered badly at the expense of indexing. I believe, we are moving into a period where small investors have a huge opportunity to make money, as they have a window to capitalize and take advantage of market inefficiency. 

Index funds mostly buy large companies. As a result, it leads to undervaluation of smaller companies, and that's where I see an opportunity for the individual investors.