The story of small triumphing over big is a familiar one. David, after all, did slew Goliath. But how familiar is the story of small cap stocks outperforming their bigger cousins? The answer may surprise you and it’s our thesis that in terms of generating alpha (outsized returns) in investing, small caps contain the most value and present traders with greater arbitrage opportunities relative to their peers. It’s a bold claim, we know but there’s some strong proof. Let’s start by looking at the so-called supposed disadvantages of small caps – our point here being that we don’t consider them
