We’re Buying Small-Cap Stocks, Says Stonehorn's Le Cornu

The video discusses the current market rotation, focusing on valuations and the end of momentum stocks. It highlights the structural growth in China, emphasizing the growing middle class and investment opportunities. The speaker explains their strategy of investing in small caps, noting the potential for earnings growth and the importance of long-term patient capital. They also mention the challenges faced by tech and internet stocks, particularly Chinese ADRs, and the need to remain disciplined in investment decisions.

What is the main reason for the end of momentum stocks as a risk-on trade?

• Increase in inflationary expectations

• Growth in middle-class population

• Decrease in stock valuations

• Rise in unemployment rates

What is a key factor driving structural growth in China?

• Decrease in millennial population

• Growing middle class

• Steady CPI at 5%

• Decline in urban job creation

Why are small-cap stocks considered attractive in the current market?

• They have low earnings growth

• They are less affected by leadership rotation

• They are highly volatile

• They are primarily targeted by hedge funds

What is the expected earnings growth for small-cap stocks mentioned in the video?

• 30-35%

• 10-15%

• 25-30%

• 20-25%

What is the investment strategy mentioned for small-cap stocks?

• Short-term trading

• Buy and hold for five years

• Day trading

• High-frequency trading