Small Value Companies | Wisdom, Wealth, and Wellness

Jonathan Satovsky
CFP®, ChFC®, CIMA®, CPWA®, CDFA®, DACFP

Good morning, good afternoon, good evening. Depending on the part of the world you’re in. This is Jonathan Satovsky of Satovsky Asset Management and on today’s episode of “Seeking Wisdom, Wealth, and Wellness,” I want to talk about small value companies.

Why do I want to talk about small value companies? Well, a lot of academic evidence points to the fact that this market of really tiny companies representing less than 2.5% of the total market, if you concentrate on this little sliver of the world and you close your eyes, there has never been a 25 year period that you wouldn’t outperform the markets by a pretty good margin. Now, that’s history. Going forward and in history, you have to realize that I say over 25 years. So that means over time, not all the time, but over time. There are periods of time, 1, 3, 5, 10, 15, even 20 years, that you can underperform the market by owning the smallest value, cheapest companies in the marketplace.

But what’s interesting is, it’s over time, not all the time. Yet, when something isn’t working, even though intellectually you know it makes sense that you have more runway and more growth when you’re starting from a small base and growing large, we’re human in nature. Human nature is so [contradictory], everyone wants to be independent, but it’s hard not to want to be with the crowd. As I think the famous Jean-Marie Eveillard said, [along the lines of] when you find something out that no one else knows, it’s really cold away from the herd. Then the herd comes your way, and you’re finally validated.  And then you’re like, “You know what? I don’t want to be near the herd, I want to get back into the cold again.”

So think about that on your path to Wisdom, Wealth, and Wellness.

Good luck.

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Video Recorded April 30, 2023
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Disclosures

This blog post is not intended to be, nor should it be construed or used as, an offer to sell, or a solicitation or offer to buy any securities or interests in any strategy offered by Satovsky Asset Management, LLC (“SAM”). SAM is a registered investment advisor with the Securities and Exchange Commission – for more information see www.adviserinfo.sec.gov. Please remember that different types of investments involve varying degrees of risk, and that past performance is not indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the strategies recommended or undertaken by SAM) will be profitable. Market index information shown herein is included to show relative market performance for the periods indicated and not as standards of comparison. The market volatility, liquidity and other characteristics of SAM’s portfolio composition are materially different from the securities listed on public market indices. Market index information was compiled from sources that SAM believes to be reliable. No representation of guarantee is made hereby with respect of the accuracy or completeness or such data. Opinions are as of date of video and are subject to change. A copy of SAM’s current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request. SAM undertakes no duty to update information presented herein.

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