The Multiple Compression Is a Good Thing for Small Caps

The Russell 2000 and the small cap 600 index, they're still down about 24 to about 20% from the peak. The multiple compression so far this year has been as severe as we've seen in a very long time. Most of the companies that we're looking at are actually holding up very well. Their earnings are still growing strong.

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IN THIS EPISODE, YOU’LL LEARN:

03:55 - Rayna debunks some of the myths on investing in small cap stocks.
05:24 - What are some common mistakes investors make when investing in small cap companies?
08:28 - The benefits of including small cap companies in your portfolio.
09:19 - Rayna's investment criteria for finding great small and mid cap companies.
21:04 - How to determine if a company’s growth is sustainable and persistent.
24:12 - The difference between small cap growth vs small cap value strategies.
30:06 - How small cap companies typically perform in high inflationary, low growth environments.
38:15 - Why the multiple compression in small caps make them very attractive right now.
39:00 - What are some companies Rayna thinks have great potential right now?
42:13 - What is Rayna’s valuation process for small cap companies?
45:42 - Rayna’s conviction behind Five Below, Etsy, and Bumble.
And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

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Related Episode: Small Cap Investing w/ Eric Cinnamond - TIP156.

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