Written by Dali
MANY investors would be indifferent to investing in large cap stocks and small cap stocks. The inherent dangers of investing in small caps need to be investigated so that investors have a better grasp of the risks involved.
There is a very popular local fund manager who has performed admirably, largely thanks to his picks in mid and large caps. However, his track record was compromised somewhat by his picks among small caps; in fact, it was pretty dismal.
The biggest attraction of small caps is the huge growth potential. Most successful large cap companies started at one time as small businesses. Small caps give the individual investor a chance to get in on the cheap. Everyone talks about finding the next Genting, YTL or IOI Corp. However, the reality is that very few small caps make the grade.
It is certainly easier to grow from a market cap of RM100mil to RM500mil but it's a totally different scale to grow from RM1bil to RM5bil. At some point you just can't keep growing at such a fast rate due to restrictions in the sector size.
Read the rest of the article here (the Star)
MANY investors would be indifferent to investing in large cap stocks and small cap stocks. The inherent dangers of investing in small caps need to be investigated so that investors have a better grasp of the risks involved.
There is a very popular local fund manager who has performed admirably, largely thanks to his picks in mid and large caps. However, his track record was compromised somewhat by his picks among small caps; in fact, it was pretty dismal.
The biggest attraction of small caps is the huge growth potential. Most successful large cap companies started at one time as small businesses. Small caps give the individual investor a chance to get in on the cheap. Everyone talks about finding the next Genting, YTL or IOI Corp. However, the reality is that very few small caps make the grade.
It is certainly easier to grow from a market cap of RM100mil to RM500mil but it's a totally different scale to grow from RM1bil to RM5bil. At some point you just can't keep growing at such a fast rate due to restrictions in the sector size.
Read the rest of the article here (the Star)
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