2024-07-19 04:57:22 ET
Summary
- In this article, I review my investments in mid and large-cap value stocks since October 2023.
- The portfolio returned a 14% return, narrowly beating the S&P equal-weighted index, but underperforming the S&P 500. 4 out of 10 picks beating the S&P 500.
- Successes include Disney and RTX, while mistakes included Bath & Body Works, British American Tobacco, and Green Thumb.
- I reflect on the importance of having clear, company-specific catalysts.
Trying to maximize my advantage over institutional investors, this year I have shifted my focus to small and micro-cap stocks with strong growth potential. But I still held a number of large cap value stocks I bought last year. Mostly, these didn't outperform the S&P 500, which has made me question the value of stock picking in this portion of the market. At the same time, the bear market in small caps (which seems to be ending) was a stark reminder that it's important to be well-diversified by market cap in addition to industry. As the importance of technology increases, it seems that the returns to scale will only increase in many industries, meaning that small caps may continue to underperform. This is why I would like to review my results from investing in mid and large cap value stocks over the last 9 months and draw some lessons....
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For further details see:
Is It Worth Picking Individual Large Cap Value Stocks? My H1 Performance Says No