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Episode 043: Eduardo Repetto on factor investing, host Rick Ferri

Bogleheads On Investing Podcast

CHAPTER

How to Buy a Small Cap Security With a Discount Rate

A discount rate means you need to get a higher rate of return. The lower the number that I pay today for the dollar in the future is the higher discount rate. So when you have a strategy that is trying to buy low price securities related to fundamentals, you are really trying to capture that high discount rate. But if I tell you you're buying small caps, there is nothing that tells you that a small cap security can have a premium.

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