Large-Cap Stocks Holding Up Better Than Small-Caps

The video discusses the valuation of small caps, highlighting their current trading at about two times sales. It contrasts small caps with large caps, noting a market divergence and a transition since 2014. The video explores the relevance of the price to sales metric, especially for new companies, and discusses the challenges of declining earnings and higher valuations. Historical data suggests potential for small caps, with a focus on the U.S. economy's strength.

What valuation metric is highlighted as interesting for small caps in the current market?

• Return on equity

• Price-to-earnings

• Price-to-sales

• Debt-to-equity

What significant market transition occurred around 2014?

• The market became more volatile

• Small caps started leading the market

• Large caps began to outperform small caps

• Interest rates significantly increased

Why might investors be hesitant to invest in large caps despite their market preference?

• Stable dividend payouts

• Strong international presence

• Declining earnings and higher valuations

• High growth potential

For which type of companies is the price-to-sales metric particularly relevant?

• Companies with low debt

• Companies with high dividends

• Newly public companies

• Established large cap companies

What historical event is referenced to suggest a potential rally in small caps?

• The dot-com bubble

• The 2008 financial crisis

• The 2010 European debt crisis

• The 2003 small cap rally