You’ve read my blogs about the premiums to be found in the market – they occur most of the time – persistently not constantly. Small beats large, value beats growth, etc.Do I watch the market closely – well – yes – with a focus on the major asset classes noting when the “premiums” are in play and when they are not. We don’t invest for a short time – so though it may be interesting to nerdiest among us to look at a week's time – it’s not instructive.I noticed at the end of May, that small stocks were in favor for a number of days almost every day over the large stocks indices of S&P500 and Dow Jones. So just for fun I threw together a chart from Tuesday May 24 through Thursday June 2. See the chart below. Click on it to enlarge it. Yes! The small stocks were really performing well - over 4% in a very short time frame!
The chart shows the Russell 2000 (small stocks) +4.06%, Emerging Markets +2.29%, S&P500 +1.83%, International Developed, +1.30% and finally the one we always hear about, the Dow Jones, only 32 stocks, +0.94%. So small stocks were up more than 4 times than the Dow Jones over this brief time period – and all the asset classes shown beat the Dow Jones include Emerging Markets and International Developed.What conclusions can be made? Well, none. Not even remotely close to the 15-30 years of data needed to make a conclusion about returns! Do I enjoy the times that one of the prime premiums (small over large) is showing up? Of course! Love it! And there are times it is not in favor too. The conventional financial press spends all its hours publishing information of no use to true investors – so this is out of character for my firm to join the conventional financial press! So instead of making an investing point that can change your life forever – in this Blog – just a little fun watching the market!