An interesting proposition, put forward by seasoned fund manager Gervais Williams of Miton in his new book "The Future is Small: Why AIM will be the world’s best market beyond the credit boom", just published by Harriman House.
From the summary:
In a financial world dominated by gigantism, the beauty of smallness hasn't had much of a look in. Yet beyond the credit boom, globalisation has been found wanting, with growth hard to find. Could it be that small firms are set to be the stock market outperformers of the future?
I have a lot of sympathy for the fact that, at the moment, small- and micro-cap stocks are out of favour (just look at the relative under-performance of the FTSE Small-Cap, Fledgling and AIM indices since March of this year), but offer a number of very interesting long-term growth companies with exciting prospects.
Most importantly, a substantial number of these companies also offer solid financials in terms of profitability, balance sheet and corporate governance. Funnily enough, you can even use an increasing number of these smaller stocks to construct a value/income/quality-oriented portfolio, of course with help on the screening side from Stockopedia!
You can find some interesting blurb about the (fairly short, at 144 pages) book here:
http://thought-leadership.top-consultant.com/UK/FullArticle.aspx?ID=3350
If you want to buy the book, Harriman House have a discounted offer here:
http://www.harriman-house.com/book/view/1083/trading/gervais-williams/the-future-is-small/
Could be worth a read - I still have Williams' last tome "Slow Finance" on my bookshelf, next to be read... But I think I will get around to this one as well, as it chimes with my own investing inclinations...
Edmund
