101 days ago • Posted by Charles-Henry Monchau
Nasdaq vs. U.S small caps: the great mean-reversion trade?
"U.S small caps have been massively underperforming Tech stocks over the last 2 years. With the exception of the post-corporate tax reform run, and a few other blips, flows have been consistently negative for small caps over the last 9 years. But maybe a bottom is forming. Small caps have a lot of leverage to a recovery and are poised to disproportionately benefit. Not only is that true from a fundamental perspective, but it’s also true in terms of positioning. Small caps remain pretty seriously under-loved, and while it would take an enormous amount of capital just to get back to early ’19 levels, tech has plenty to give" - source: The Market Ear, Jefferies