Comments on: Is It Large Caps’ Time To Shine ? http://www.tradersnarrative.com/is-it-large-caps-time-to-shine-1291.html Freshly squeezed market commentary & analysis Thu, 08 Jan 2009 22:26:57 +0000 http://wordpress.org/?v=2.0.2 by: Mid Cap Index Outperforming Both Small & Large Caps http://www.tradersnarrative.com/is-it-large-caps-time-to-shine-1291.html#comment-33409 Mon, 02 Jun 2008 20:31:29 +0000 http://www.tradersnarrative.com/is-it-large-caps-time-to-shine-1291.html#comment-33409 [...] The market does tend to go through drawn out cycles when the large caps and the small caps take turns leading. But I’m not familiar with the Mid Caps taking center stage like this. capitalization, cycle, mid caps, relative performance, small cap, small caps, stock market, trends [...] […] The market does tend to go through drawn out cycles when the large caps and the small caps take turns leading. But I’m not familiar with the Mid Caps taking center stage like this. capitalization, cycle, mid caps, relative performance, small cap, small caps, stock market, trends […]

]]> by: Cuentas Bancarias http://www.tradersnarrative.com/is-it-large-caps-time-to-shine-1291.html#comment-22950 Fri, 30 Nov 2007 23:53:07 +0000 http://www.tradersnarrative.com/is-it-large-caps-time-to-shine-1291.html#comment-22950 I think Tweakie has a definate point regarding credit risks. Without doubt the cost of raising capital has reacheda high point again. The effect is certainly felt most by those companies who are a weaker credit risk because the cost of borrowing will be even greater for them than for a low credit risk company. I think Tweakie has a definate point regarding credit risks. Without doubt the cost of raising capital has reacheda high point again. The effect is certainly felt most by those companies who are a weaker credit risk because the cost of borrowing will be even greater for them than for a low credit risk company.

]]> by: Tweakie http://www.tradersnarrative.com/is-it-large-caps-time-to-shine-1291.html#comment-22945 Fri, 30 Nov 2007 22:11:20 +0000 http://www.tradersnarrative.com/is-it-large-caps-time-to-shine-1291.html#comment-22945 It has to do with the credit worthiness of the firms. In general, but not always, large-caps have lower credit risks than small-caps. Hence, when the opportunity cost of raising new capital becomes high, as seen in the late 90's and again now, firms with lower credit risks tend to do better than firms with higher credit risks. This is especially true in the current risk-averse business environment with corporate bond yield spread setting new highs. And yes, to a lesser degree, multinationals will outperform at the margin due to the relatively low US dollar, which contributes to the outperformance of large-caps. It has to do with the credit worthiness of the firms. In general, but not always, large-caps have lower credit risks than small-caps. Hence, when the opportunity cost of raising new capital becomes high, as seen in the late 90’s and again now, firms with lower credit risks tend to do better than firms with higher credit risks. This is especially true in the current risk-averse business environment with corporate bond yield spread setting new highs.

And yes, to a lesser degree, multinationals will outperform at the margin due to the relatively low US dollar, which contributes to the outperformance of large-caps.

]]> by: Prospectus http://www.tradersnarrative.com/is-it-large-caps-time-to-shine-1291.html#comment-22915 Fri, 30 Nov 2007 12:15:47 +0000 http://www.tradersnarrative.com/is-it-large-caps-time-to-shine-1291.html#comment-22915 I think the dollar has something to do with it. Also, look at your chart below on interest rates and the Fed. The small cap performance is inversely related to the rates. I'd say that small companies are hurt more by a high cost of capital than large caps. Also, they benefit more from cheap money to expand with. I think the dollar has something to do with it. Also, look at your chart below on interest rates and the Fed. The small cap performance is inversely related to the rates. I’d say that small companies are hurt more by a high cost of capital than large caps. Also, they benefit more from cheap money to expand with.

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