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re: Question regarding Market Cap
Posted on 1/22/14 at 5:23 pm to beaverfever
Posted on 1/22/14 at 5:23 pm to beaverfever
I measure market cap against enterprise value, and also book value per share. As mentioned earlier, stock splits, but also recently, as in this bull market recently, company buy backs of their stock, which they have done a lot in order to meet earnings estimates. It also is somewhat an indicator of liquidity
1
Posted on 1/22/14 at 6:45 pm to Iowa Golfer
Market cap is essentially where the equity markets value a particular company, and the fairly near term expectations of its earnings.
The larger the market cap does NOT guarantee a safer investment, and it doesn't mean you can't make a lot of money on them. Look at GM and GEs recent histories and you see one large cap file bankruptcy and the othersstock price increase 150% or so since 2008 (guesstimate).
A diversified portfolio of large caps should be less volatile and offer a more consistent dividend and a diversified portfolio of small caps should offer more volatility with less consistent and often smaller div yields..
Nothing is constant or an absolute truth with common stocks.... everything is statistical.
The larger the market cap does NOT guarantee a safer investment, and it doesn't mean you can't make a lot of money on them. Look at GM and GEs recent histories and you see one large cap file bankruptcy and the othersstock price increase 150% or so since 2008 (guesstimate).
A diversified portfolio of large caps should be less volatile and offer a more consistent dividend and a diversified portfolio of small caps should offer more volatility with less consistent and often smaller div yields..
Nothing is constant or an absolute truth with common stocks.... everything is statistical.
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