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    Investing in smallcaps in volatile times: Just do a bit of hard work and add a pinch of patience

    Synopsis

    In a period where small-cap stocks underperformed significantly, leading to a situation where large investors were calculating their losses in their small-cap holdings, there would be a group of steadfast enthusiasts who continue to see potential in small caps. Investing in these stocks, even amidst turmoil, can be sensible for those prepared to maintain their investment for three to five years. However, it's crucial to recognize the distinction between high-quality and poor-quality businesses across the small, mid, and large-cap spectrums, as well as the difference between the intrinsic value of a stock and the overall value of the company. Certain niche small businesses may still generate significant returns over time if they are held long enough. On the other hand, if one's approach to small-cap investments is merely based on the absolute value of a stock with hopes of a tenfold increase, then it's a misconception. Stock market investing, whether in small, mid, or large caps, should not be driven by unrealistic expectations; otherwise, it leads to nothing but undue stress, rather than substantial returns.

    In today’s trading session, just one index heavyweight, Reliance Industries, has been able to change the mood of the market. Imagine what would have been the mood of the Nifty, if HDFC Bank would have also joined the rally today. But how is Josh in your small cap portfolio? Probably not very high as the market breadth is still not that good as it used to be in the past and the small caps are still in the profit booking mode. So, if you're
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