Investment Q&A

Certainly the headwinds noted are an issue, and of course that's why small caps are cheap. But essentially confidence is another consideration. Right now, 'everyone' is worried about 'everything', or so it seems. But we noticed an increase in M&A activity in the sector recently (NBLY, HEO, OPS and others). Longer term thinking management teams and larger companies are seeing value. We think a staggered approach is probably best, perhaps over three to four months. If one wants to play an ETF, we think mid November is probably best to capture some of the January effect after tax losses. But, we do not think timing is going to matter much. Small caps are not far from 2008 valuations, and the economy is certainly in different (better) shape than back then.