Meet James O’Shaugnessy’s Tiny Titans
Introducing a unique small/micro-cap strategy called “tiny titans,” which was developed and introduced by James O’Shaugnessy in his 2006 book, “Predicting the Markets of Tomorrow“. James O’Shaugnessy is also present on meetinvest with a value and a growth strategy.
A Simple Investment Strategy
Tiny Titans looks for cheap small caps with upward price momentum. It is a simple investing strategy and requires minimal data as indicated in the success formula.
Two Reasons for Micro-Caps
In previous books, O’Shaughnessy avoided micro-cap strategies but developed this one for two reasons:
1. Micro-cap stocks have little or no analyst coverage so are often overlooked or ignored
2. Micro-cap stocks have low correlation with the S&P (0.66) so they can be included in a diversified investment strategy
The screen looks for companies with a market cap between $25 million and $250 million, a price to sales of less than 1, excludes over the counter stocks, and finally, ranks the top 100 based on the greatest relative strength over the past 52 weeks. This creates a list of highly volatile and risky stocks.
James O’Shaughnessy is chairman, CEO and CIO of O’Shaughnessy Asset Management LLC. He plays an active and integral part in all portfolio research and management decisions in his firm. Among investors, he is best known for his pioneering work in quantitative analysis, described in his book What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time, and which sought to finally answer the question of what works best – value or growth investing.
→ Read more about this new strategy here and see how a portfolio would have performed using his strategy.