The Small-Cap Advantage: How Top Endowments and Foundations Turn Small Stocks into Big Returns (Wiley Finance Book 663) Kindle Edition
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From the Inside Flap
The historical returns of small-cap stocks have exceeded those of mid-cap and large-cap stocks over long time periods. The additional return experienced by small-cap investors has occurred despite inherent disadvantages in the asset class.
The excess return available from small-cap stocks can help large foundations, endowments, and other similar institutional investors overcome the drag of inflation and the drain of annual spending. These institutional investors are in a unique position to fund new and often untested managers who are in the best position to benefit from the return premium of small-cap stocks and from the relative lack of professional participation in the space.
The Small-Cap Advantage: How Top Endowments and Foundations Turn Small Stocks into Big Returns is a must-have book for aspiring and existing small-cap managers and the institutions that would hire them. It is an insider's account of institutional small-cap investing. The book details the investment, fundraising, and operational challenges encountered by small-cap managers. It also:
- Describes the evaluation issues encountered by institutions in their small-cap manager due diligence
- Reveals why small-cap stocks are a fertile hunting ground for investors seeking high returns over long time periods
- Details how top foundations, endowments, and other institutional investors can procure exposure to small-cap stocks through allocations to specialist managers
- Explores the reasons for small company outperformance and reveals how returns can be further enhanced through the careful avoidance of problem companies
- Explains why the small-cap space is ideal for active management and why passive indexing may not be an optimal strategy for this asset class
The Small-Cap Advantage helps aspiring small-cap managers understand the state of the institutional investment management industry. It debunks the notion that small-cap managers who lack long track records or high levels of assets under management are undeserving of institutional funding. It explains the fundraising process for aspiring small-cap managers and how they can handle many of the challenges that come with successfully increasing strategy assets.
The Small-Cap Advantage provides endowment-model institutions with a deeper understanding of the unique issues faced by specialist boutique managers who focus on the small-cap space. It will also assist institutional due diligence teams in their evaluation of small-cap managers. --This text refers to the hardcover edition.
About the Author
BRIAN T. BARES, CFA, is a research analyst with Bares Capital Management, Inc. He founded the firm in 2000 with the belief that concentrated portfolios of inefficiently priced small companies could lead to high relative compounding. His firm manages the institutional portfolios of small-cap and micro-cap common stocks in long-only, replicated separate accounts. Mr. Bares began his career by working his way up from the bottom. From compliance and operations, to trading and portfolio management, he garnered experience in nearly all aspects of running a boutique small-cap management company before starting his own company. He graduated from the University of Nebraska with a degree in mathematics. His investment philosophy and strategy have been profiled in Value Investor Insight and the Manual of Ideas: Portfolio Manager's Review. Mr. Bares holds the Chartered Financial Analyst designation and is a member of the CFA Society of Austin. He resides in Austin, Texas, with his wife and two sons. --This text refers to the hardcover edition.
- File Size : 1227 KB
- Word Wise : Enabled
- Print Length : 212 pages
- Publisher : Wiley (19 January 2011)
- Enhanced Typesetting : Enabled
- Screen Reader : Supported
- ASIN : B004KKY1EW
- X-Ray : Not Enabled
- Text-to-Speech : Enabled
- Language: : English
- Best Sellers Rank: 1,430,036 in Kindle Store (See Top 100 in Kindle Store)
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The only takeaway is the one I am laying out here.... small caps are not researched or looked at by Pros and analysts. That means they are often inefficiently priced even in USA. That means If you are a Pro playing in that space then you can make lot of money by virtue of having advantage of a Pro playing with lot of uninformed amateurs.
The key lesson...if you are good stock analyst then seriously consider playing in this space. because You have an edge. But If you are not good self reliant stock analyst then stick to large and mid cap space that are more researched and information is freely available to make decisions. If you play in small and micro cap space then you may lose your shirt in no time. It is like playing game of Poker with a professional poker player. You get the message.
The writing is ok but there was nothing new. I suggest reading investor letters and
investment thesis by renowned small cap investors. Those are definitely more informative.