Value Degen’s Substack

Value Degen’s Substack

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Value Degen’s Substack
Value Degen’s Substack
Paywalled small cap of the week, a potential 4x-5x with exposure to robotics.

Paywalled small cap of the week, a potential 4x-5x with exposure to robotics.

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Unemployed Value Degen
Jul 18, 2024
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Value Degen’s Substack
Value Degen’s Substack
Paywalled small cap of the week, a potential 4x-5x with exposure to robotics.
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It has been quite a week as small cap stocks rally.  People are starting to call it the small cap summer, and some analysts are projecting the Russell 2000 could go up another 40% before the end of 2024.  I am cautiously optimistic, but I have endured so much pain in holding these stocks for the last year, that maybe we are due for a little mean reversion.  This recent rally has made a lot of my past recommendations look a little more genius than they deserve to, none of the companies have had any earnings announcements or material changes to their businesses, but oh how price drives narrative.

A lot of stocks that have run up by 20% no longer seem as cheap as they once did, anchoring bias is real.  But the depressed valuation of small cap stocks, especially now that they have some positive momentum, probably indicates that it is still time to be buying, even if it feels bad.  It will be a challenge to know when to sell, but I am looking for more than a two week rally after twenty years of small cap underperformance.

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