Mid-cap Inflation

August 4, 2021

My entire career I've been told by the old timers that many of their biggest winners have come from Mid-caps.

That always stuck with me, to the point where when we win in mid-caps, it always hits me, "Those guys were right!"

To be clear, the traditional definition of a Mid-cap stock is between $2-10 Billion in Market Capitalization (Market-cap = shares outstanding x price of the stock).

I honestly don't know how long that's been the definition, or who's in charge of making that up. But I will tell you that I don't remember a time when that wasn't the definition.

And I've been around a couple of decades already.

So is anyone factoring in Mid-cap inflation these days?

I don't see it anywhere.

In my opinion, that sweet spot of "Mid-caps" is probably more like up to $30-35 Billion. I mean, we have a bunch of $1 Trillion companies at this point.

You think $10 Billion should be classified as a Large-cap?

I certainly don't.

That's nothing. For me, $10B is still in that Mid-cap sweet spot.

You can buy these stocks at $10B and they can easily double from there. And then double again. And then again after that.

$10B is a far stretch from $AAPL or $AMZN or $GOOG or any of these really big caps.

Even catching something around $30B is a drop in the bucket, in comparison.

So that's what we do. We're looking for stocks between $2-35 Billion Market Cap. The goal here is find the next $100B companies with enough time to ride their trend on the way there.

We call it the 2-to-100 Club.

And here's this week's scan: