Is small still beautiful in the equity game?


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.

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