Kohler’s Charts – Small Ordinaries Index

By Alan Kohler | More Articles by Alan Kohler

The shifts between small caps and large caps this year have been massive. In August the Small Ordinaries Index had outperformed the 20 Leaders by almost 20%, but four months later that has been largely reversed.

The Small Ords has dropped almost 10% while the Top 20 has risen just over 5% – in other words the blue chips have outperformed the tiddlers by an extraordinary 15% in four months. Investors are getting whiplash!

What happened after August? A perfect storm, that’s what. High PE growth stocks have gone out of favour, led by the China baby formula stocks, led by Bellamy’s, the gold price collapsed, there were lots of negative chairmen’s comments at AGMs, mainly by small caps. But as a general comment, they just got too expensive.

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About Alan Kohler

As well as being the founder of The Constant Investor, Alan is currently business editor at large of The Australian, finance presenter on ABC news, presenter of the Talking Business channel on Qantas inflight radio and adjunct professor in the business faculty of Victoria University.

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