Category: Extended Small Cap Commentaries

Extended Small Cap – Q2 2022 Commentary

August 2nd, 2022
Following a macro-driven environment in the first quarter of 2022, which included exogenous impacts like the invasion of Ukraine, we had anticipated the potential for somewhat better visibility into the economic path looking forward in the second quarter.  We instead experienced a quarter that featured rapid shifts in the assessment of inflationary pressures, Fed policy,…

Extended Small Cap – Q1 2022 Commentary

May 10th, 2022
The transition from Q421 to Q122 carried with it some elements of déjà vu from last year’s turn of the year.  After strong returns to close out 2021, the first quarter of 2022 saw a return to macro-driven forces and a volatile market, much like the start of 2021.  Likewise, we witnessed a return of…

Extended Small Cap – Q4 2021 Commentary

January 26th, 2022
We turn most years with a combination review of the past 12 months receding in the mirror and an assessment of the economy and markets as we enter the year ahead, most often with a healthy dose of humility thrown in.  We try to remind ourselves (and our readers!) about the importance of listening to…

Extended Small Cap – Q3 2021 Commentary

October 29th, 2021
We’ve written previously about the unique challenges often present for summer quarters in the equity markets, especially for small cap stocks.  Historically, we’ve observed this primarily due to the market looking for economic or policy direction, many investors being on vacation, and volumes tending to be lighter, which can lead to conflicting or exaggerated signals…

Extended Small Cap – Q2 2021 Commentary

July 30th, 2021
The second quarter of 2021, much like the first, featured a number of sentiment shifts and what felt like largely macro-driven market movements.  We observed what we believed to be an acceleration in earnings revisions and business fundamentals, alongside a market calibrating the rate of overall economic recovery.  As a result, while there were areas…

Extended Small Cap – Q1 2021 Commentary

May 7th, 2021
After witnessing the very strong, liquidity-driven returns from Q420, we would have been hard-pressed to project the strength of the forces that subsequently transpired during Q121.  While some effects continued their prior trend (for example, the strong fund flows into small caps, including value), the intensity of macro impacts remained outsized and featured some truly…

Extended Small Cap – Q4 2020 Commentary

January 26th, 2021
“But neither a bull nor a noble-spirited man comes to be what he is all at once.  He must undertake a hard winter training, and prepare himself…” – Epictetus, Stoic Philosopher In past letters, we’ve discussed the essential virtue of persistence and the notion of the investment market being a stage not of our design. …

Extended Small Cap – Q3 2020 Commentary

October 30th, 2020
As the year grinds ahead, we find ourselves adding layers of market-perceived risks to our analysis of the economy, market, and individual stocks – on top of the fiscal and economic response to the coronavirus and the progression of the pandemic itself.  Our market calculus continues to return projections with nonlinear outcomes, but also significant…

Extended Small Cap – Q2 2020 Commentary

July 29th, 2020
We’ve discussed this year a philosophical teaching to expect the unexpected and to be prepared to make the best of it.  Following the swift events at the end of the first quarter, where a month’s time in March felt something like a full quarter, we came to the second quarter, where three months of time…

Extended Small Cap – Q1 2020 Commentary

May 6th, 2020
When we wrote last quarter about the Stoic teaching to expect the unexpected and to be prepared to make the best of it, the events that transpired as we rolled through the first calendar quarter, and especially the month of March, were most definitely not what we had in mind.  After entering 2020 with the…

Extended Small Cap – Q4 2019 Commentary

February 6th, 2020
“That’s why the philosophers warn us not to be satisfied with mere learning, but to add practice and then training.  For as time passes we forget what we learned and end up doing the opposite, and hold opinions the opposite of what we should.” -Epictetus, Stoic Philosopher In our past few year-end letters, we’ve taken…

Extended Small Cap – Q3 2019 Commentary

November 4th, 2019
Summer quarters can often present unique challenges for the equity markets, and particularly for small cap stocks. Historically, we’ve observed this primarily due to the market looking for economic or policy direction, many investors being on vacation, and volumes tending to be lighter, which can lead to conflicting or exaggerated signals in share prices. Even…

Extended Small Cap – Q2 2019 Commentary

July 27th, 2019
After a strong first quarter rally and an important shift from market expectations of steady Fed rate hikes to a more data dependent outlook, we entered the second quarter looking for indications as a cue to the direction of the market and U.S. growth, and any impacts which might be derived from either the volatile…

Extended Small Cap – Q1 2019 Commentary

May 9th, 2019
We exited 2018 in the context of a fairly dramatic and sentiment-driven selloff which reached its climax over the holidays.  Our outlook entering 2019 highlighted the significant difference in that sentiment (and the correspondingly much lower expectations for growth and much higher expectations for risk) vs. what we saw the prior year – even in…

Extended Small Cap – Q4 2018 Commentary

February 1st, 2019
  “A hero is no braver than an ordinary man, but he is brave five minutes longer.” – Ralph Waldo Emerson We do not consider ourselves heroes, and – to be sure – there was little heroic about small cap equity returns during 2018 overall, nor about the relative performance from the bulk of equity…

Extended Small Cap – Q3 2018 Commentary

October 29th, 2018
We’ve noted in prior letters our view that the summer quarter can be a challenging one for the markets, particularly for the small cap stocks which are our focus. In the summer months, the market often looks for economic or policy direction, investors take their vacations, and volumes tend to be lighter leading many smaller…

Extended Small Cap – Q1 2018 Commentary

September 17th, 2018
We exited Q4 of 2017 highlighting the nature of the market’s stage – one where our actions play out, but one which we market participants did not build and one which we cannot readily redesign.  While we felt that our economic framework is still holding and that economic growth is indeed picking up, we recognized…

Extended Small Cap – Q2 2018 Commentary

September 17th, 2018
Exiting Q1 of 2018, we noted a skittish market environment, marked by two separate inversions between short and long term VIX protection contracts, and indications of a shift in what the market favored over the last two weeks of March.  The bulk of Q2 was an extension and amplification of that shift, with rising concerns…