Microcap stocks (sub $500 million in market capitalization)
have started to underperform the big cap indices, just as they did last fall
and in February. They may be a weathervane
relative to Tim’s point “It’s happening again.”
More domestically focused, more credit dependent, and more harnessed to
the
consumer than large multinationals, they get less benefit from a weaker
dollar. Individually illiquid on any given day, they can go down
fast if selling happens in earnest (ZQK and AAPL were both Q2 Galleon holdings; one
went down much faster than the other recently, as an example, maybe a
coincidence, maybe not). Chart below
shows IWC (microcap ETF) versus SPY (S&P 500). IWC led the way up since March and turned
this month. It is down 2% today.
