The only long we've really been touting has been Wal*Mart, definitely a mega-cap and acting as if it will account for half of the word's retail activity in ten years. But even that is looking a bit toppy. We are being very opportunistic, picking spots and considering anything past settlement date to be long-term.
However this too will pass, big wheel keep on turnin', bottom rail on top now boss, Rota Fortuna, blah, blah, blah, and you'll want to have some strategies gamed out when the time comes.
From Pyramis Global Advisors (Fidelity):
After a decade of unremarkable performance from mega cap equities, it may be reasonable for
investors to question whether they need exposure to the asset class, and whether their exposure to
mega caps should be through active strategies. By comparing mega caps with mid caps, represented
respectively by the 200 largest and the 800 smallest companies in the Russell 1000 Index, this
paper seeks to lay out the case for owning mega caps now, and for taking an active approach to
mega cap investing.
Why consider mega caps now?
Mega caps have been market leaders over extended periods
Over a short to medium time horizon, the casual observer could easily conclude that mega cap securities
have a justified reputation as being the most predictable and least interesting part of the equity market.1
After all, mega cap equities have underperformed mid cap equities during most of the past decade.2
However, looking back further to capture multiple market cycles, we see that mega caps have exchanged
market leadership with mid caps several times during the past three decades (see Exhibit 1, below). Mega
caps outperformed mid caps through much of the late 1980s and for a lengthy stretch in the 1990s.
In most instances, these prolonged periods of market leadership were preceded by extreme relative
valuations. With mega cap price-to-earnings (P/E) valuations currently at a low point (as discussed below),
the recent extended underperformance against mid caps suggests that the equity market may be poised
for another shift in leadership toward mega caps....MORE (7 page PDF)
HT: Horan Capital--
From The Blog of HORAN Capital Advisors