Smallcaps soared 6 percent yesterday
Holy Toledo, smallcap stocks were up 6.1 percent on Thursday. That's equal to a nearly 500-point increase in the Dow. In Barron's recently, Pinnacle Value Fund's John E. Deysher explains what might be going on.
Going into recession, small-caps lag because customers and vendors concentrate their business on larger firms that are more likely to survive. Going into recovery, however, small-caps generally do better than big-caps because customers and vendors feel they might get a better deal with more companies in the mix. Depending on the strength of their conviction that the recovery is real, stock prices can pop almost immediately. Any whiff of good news could trigger a rally.






