In our January 2024 investment-analysis we clearly saw the froth in small caps

We were an early entrant into the small cap in February 2023. Once again, this was based on data analysis. Our clients benefited from the small cap call then

We were aware of the build up that was happening in small cap valuation closer to Nov 2023. However in our January 2024 analysis, we saw the valuations were sky high.

Our normal rebalancing cycle was in Mid-February 2024. But our investment-analysis in January made us take the decision to rebalance early.

Our logic was simple:

  1. At this stage there is very little room for small cap to go up
  2. Even if small cap went up, large cap would go up by equal amount or more
  3. If the market crashed, large caps would fall lesser than small cap

Hence, we hurriedly started moving our clients away from small caps.

In January, small caps still did well. After that, it has been a downhill for small caps since then.

We cannot time the markets.

However, when the research numbers so glaringly tell a story to us…

  1. We listen
  2. We analyse
  3. We act

Our customers are very happy today!