Archive Category: 10X Stocks Archive

Today, I want to talk about small-cap stocks… Over the long arc of market history, small-cap stocks have outperformed large-cap stocks. Though that relationship was flipped on its head during the last bull market — something I’ll get back to shortly.

Last week, I made you do mental gymnastics on the topic of duration risk, also called interest rate risk. Put simply: Duration risk quantifies the degree of “headwind” an asset’s price will face if interest rates rise. In the fixed-income world, putting credit (aka default) risk aside, duration is the sole driver of a bond’s price. But in the equity world, there are many other factors at play. Here, “growth” stocks are mostly considered “long-duration” assets. They are more sensitive to interest rate moves. Specifically, when interest rates are rising, most growth stocks suffer a much stronger headwind against price increases.

The market has grown especially volatile over the past week or so. I’m writing today to encourage you to remain calm and patient. Sure, you can read up on what’s happening — an informed investor is a good investor. Though I’ll caution you against making any knee-jerk reactions to either the headlines or price action. We’re in a reactionary environment right now. The failures of Silicon Valley Bank, Signature Bank and Silvergate Capital have not only sparked concern over the stability of the U.S. banking system, but more importantly have increased uncertainty over what the Federal Reserve will do next with interest rates.

Today, I want to share some exciting updates on one of our portfolio companies: Hims & Hers Health Inc. (NYSE: HIMS). The company just reported earnings and the numbers were fantastic. Its operational momentum is alive and well, and investors pushed HIMS stock higher in response. Our model portfolio now shows an open gain of more than 50% since our August 2022 entry.

I just wrote a piece for The Banyan Edge on “value” investing. Watch for it to drop tomorrow. If you aren’t aware, The Banyan Edge is a free daily newsletter we email to more than 225,000 investors. My colleagues and close friends — Charles Sizemore, Ian King, Mike Carr and Charles Mizrahi — are also each featured on a particular day of the week. It’s our opportunity to write about the investment trends and topics we’re most passionate about … and provide truly valuable information, analysis and recommendations. My day of the week is FRIDAY…