Large Cap Stocks Climb Even as Sales Deteriorate

The video discusses the trend of passive investing, particularly in large cap companies, and its impact on the stock market. It highlights the differences in price to sales ratios between large and small cap companies, noting that large caps are perceived as safer investments due to their earnings stability. The video also examines how market valuations and the strength of the dollar influence investor behavior, with a focus on the preference for large cap stocks by foreign investors seeking liquidity.

What is one reason why investors might prefer large-cap companies over small-cap companies?

• Higher volatility

• Higher sales growth

• Perceived safety

• Lower price-to-sales ratio

According to Savita Subramanian, what is a defining characteristic of quality companies?

• High liquidity

• High sales growth

• Earning stability

• Low volatility

What advantage do large-cap companies have in terms of stock trading?

• Higher sales growth

• Easier to trade in and out

• Lower price-to-sales ratio

• Higher dividend yield

How does a weaker dollar affect multinational companies?

• It benefits them

• It decreases their sales

• It has no effect

• It increases their volatility

What is a reason foreign investors might choose large-cap stocks?

• Lower risk

• Higher growth potential

• Higher domestic sales

• Easier to invest large amounts