AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
How I Invest with David Weisburd
E115: Is the 60/40 Portfolio Outdated? w/James Langer
Nov 26, 2024
James Langer is the Chief Executive and Investment Officer at Redmont Wealth Advisors, specializing in small-cap value investing. He discusses why small-cap stocks are outperforming large caps, driven by market dynamics and historical trends. Langer highlights the complexity of implementing these strategies in institutional portfolios and the advantages of active management versus indexing. He also explores the critical role of governance in enhancing shareholder value and offers insights on effective portfolio analysis tools for investors.
30:01
Episode guests
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- Investing in small cap value stocks has historically provided significantly higher returns compared to large cap growth stocks, illustrating their underutilization.
- An active management strategy focusing on small cap investments allows for better identification of undervalued opportunities, enhancing overall portfolio performance.
Deep dives
Historical Performance of Small Cap Value vs. Large Cap Growth
Investing in small cap value stocks since 1926 would have resulted in substantial gains, with $1 growing to $491,000 at a 14.3% annual return, compared to only $13,900 from large cap growth stocks at a 10.2% return. This demonstrates a consistent 400 basis point advantage for small cap value over large cap growth throughout nearly a century. The analysis suggests that this strategy has been underutilized, particularly among larger institutional investors who often allocate only a small percentage of their funds to small cap stocks due to challenges in deploying large sums effectively. As interest rates decline, small cap value has historically generated nearly 20% annual returns, indicating favorable conditions for this asset class.
Get the Snipd
podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any
moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share
& Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode