Is talent MORE important when analyzing small cap stocks?
I was reading a bunch of articles on the fact that because small cap stocks (those under 1 billion cap) were much less efficient than those large cap stocks like google and microsoft, one’s “skill” at correctly pricing stocks is more likely to get money for the investor in small cap stocks than large cap stcks. In other words, if I KNOW that I am the best/most skilled ACTIVE investor out of each 10,000 investors, I will do better in the small-cap arena than I would do with large-cap stocks.I know that in the small cap-arena billion dollar hedge funds run into problems because of the illiquid nature of such market, but as an individual investor, shouldn’t my talent correlate more with my returns when dealing with small cap stocks? Please Answer!!!
