Size Matters?


Investment Ideas: US mid–caps worth a look?
Geo-politics: Poles stirring it up?
United States: Service sector accelerates in July
United Kingdom: Business sentiment boost in July
Eurozone: Italian business sentiment slows in July



Good morning,

Golfers refer to the “sweet spot” as the position on the face of the club head that when hit produces the maximum result. A very similar result occurs when investing in mid-cap stocks, those companies with market capitalizations ranging from $2 billion to $10 billion. Most often, they are established businesses sandwiched between slower growth large-cap multinationals and faster growing small-cap businesses. In recent years, mid-cap stocks have outperformed both their large-cap and small-cap peers with very little added risk. It’s as if they have hit the sweet spot of performance.

With the US economic activity accelerating, we are beginning to get interested in mid-cap domestic US stocks. However, we need to see calmer seas before we can be confident in taking any risk at this point. Having had an excellent year of investing so far, we are currently happy to sit on the side-lines until early September.

In addition, the softness of the M&A market in the last few days might just be a leading indicator for some nasty shocks in the weeks ahead. So let’s not be too brave.

Download a FULL PDF version of the Daily Note:

Global Macro-Daily Note 6th Aug 2014


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