Is small still beautiful in the equity game?

Thu Apr 1, 2004

After a year in which most small-cap stocks did well, picking the right company and finding the right shorts is the key to making money this year writes Sarah Wood

The intrepid breed of hedge fund managers who stake their stock picks on the high-velocity movements of the smallest public companies are bracing for a challenging ride this year. Following last year's almost-perfect conditions for small-cap investors, conditions are likely to be more challenging going forward, but not necessarily any less rewarding, particularly for finding short ideas, as a greater rationality returns to valuations.

"This is a year where you have to be in the right stock. Last year you just had to be in the market," explains Peter Keane, portfolio manager at Keane Capital Management of Charlotte, North Carolina, which runs $140 million of small-cap hedge fund assets. The firm's Keen Microcap Value Fund netted 60.43% last year, and...

ISSN: 2151-1845 / CDC10004H

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