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
"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...