Small caps are an interesting consideration right now. Ever since Trump’s election, they have had a general stimulus behind them from the widespread ethos of protectionism. Now, though, that push looks bigger than ever because of the trade war, meaning small caps might have smooth sailing. The problem is that it is hard to find the best small caps because of a lack of coverage by analysts and a weak online presence by many of them. With that in mind, Barron’s has some suggestions for how find good investments in the area, including joining online small cap communities (like Equity.guru and Small Cap Discoveries) and leveraging online discovery tools, like TMX Matrix, CEO.ca, and VRify.
FINSUM: A lot of alpha can be found in small caps simply through hard work and research. It is one of the areas of the equity markets where EMH theory is truly crap and knowledge advantages predominate.