@avneesh @ajayt001 @StonePitbull @Nickp @ChaitanyaC @jitenp @vikas_sinha
Based on my interests into small caps news/threads, hoping to learn more.
Many news on small caps is more or less summarized at The below VP discussion comparing PPFAS flexi funds vs small cap funds. (which is largely based on recent presentation by PPFAS funds)
PPFAS supports large caps and gives reference to an IIM-A study… suggesting small caps didn’t outperform large caps from 1995-2019.
Some argue PPFAS might criticize small caps due to not having a small cap fund, even though historically small cap funds have given around 20% returns over a decade.
However,
historically, when a lot of money pours into small caps, they tend to go down heavily with a slight market correction. Small cap funds usually follow a pattern: 2-3 years of a rally and then 1-2 years of a gloomy period. This aligns with Howard Mark’s book on market cycles, indicating we’re currently at the peak/getting to the peak of a small cap funds rally.
My query is regarding small cap stocks for a retail investor(who is 93% small caps), how one can wade through these situations.
1.If we can not time the exact top, what could be time frame to run, Diwali-23 or July-24? what time frame do you feel is comfirtable before it gets gloomy?
2.What can be prudent approach, if we are not sure about running away, e.g. can take off partial profit?.