Small Caps Lead the Year’s Best Week
The S&P 500 peeked over 6,000 on Friday as our growth portfolio eclipsed the $9,000,000 mark.
Both the Dow and the S&P 500 notched their best weekly percentage gains since early November 2023, and the Nasdaq delivered its best week in two months and second-best of the year. Here’s the tally:
Large-Cap Gains (%)
Week Ended 11/8/24
– – – – – – – – – – – – – – –
5.7 Nasdaq
4.7 S&P 500
4.6 Dow
Best of all for patient small-cap investors was that small caps rose their most since April 2020.
Investors consider them to be in the best relative position for an environment likely to include fewer regulations, lower taxes, and new tariffs. Small caps are less able than their larger-cap siblings to get around regulatory burdens and high taxes, and are less dependent on imported goods and materials. Thus, they should benefit more from regulatory relief and reduced taxes, and suffer less from new tariffs.
Here’s how small caps fared last week:
Small-Cap Gains (%)
Week Ended 11/8/24
– – – – – – – – – – – – – – –
8.7 IJR
8.6 S&P 600
8.5 Russell 2000
Let’s hope this is finally the push that takes small- and mid-cap stocks back to their historically outperforming ways, after a multi-year hiatus brought on by pandemic shutdowns and higher interest rates. Smaller companies are raring to catch up, reaching for hand-holds in better conditions.
They were so strong last week that our non-leveraged 3Sig plan stayed fairly tight with our leveraged 6Sig and 9Sig plans:
369 Gains (%)
Week Ended 11/8/24
– – – – – – – – – – – – – – –
8.0 3Sig
8.5 6Sig
10.8 9Sig
This is partly a function of 3Sig sporting a 91% stock allocation, compared with 66% for 6Sig and 9Sig, but was more a function of small caps leading the week by a big margin. The S&P 600 rose 8.6% compared with 5.4% for the Nasdaq 100. It was nice to see the little guys running circles around megatech for a change.
From Note 44 sent November 10, 2024
