📈 Small cap superheroes: what Owen looks for when investing
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What is the main topic discussed in this episode?
Property investors often talk about using debt to build wealth. In the share market, that's called gearing. With the BetaShares WealthBuilder range, investors can access moderate gearing into shares, and with the newly launched GG-BL, That means exposure to a diversified portfolio of around 1,300 global companies excluding Australia, all with no loan applications, credit checks, or margin calls. Gearing magnifies both gains and losses, so it's only suitable for investors with a very high tolerance for risk. You can learn more about the WealthBuilder range of ETFs at the BetaShares website. And don't forget to read the PDS and TMD to decide if it's right for you. BetaShares Capital Limited is the issuer.
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This podcast contains general financial advice only. That means it's not specific to you, your needs, goals, or objectives. So don't act on the information until you've spoken with your financial advisor. You'll find our full disclosure, disclaimer, and link to our financial services guide in the show notes. Kate Campbell, welcome to this episode of the Australian Finance Podcast.
Good to be back, Owen, to talk about one of your favorite topics.
Yes. This is not a special episode, Kate. No, just a standard. This is a standard episode of the Australian Finance Podcast where we talk about small cap investing as part of our Shares Month 2022. So if you're new here, this is Shares Month. You can go back and listen to all episodes in this mini-series where we talk about everything from getting started in shares right through to Q&A with real-life analysts. In this episode, we're talking about smaller companies, aka small caps.
How small are small caps?
Well, that depends on who you ask and which market you're investing in. So for example, in Australia, we might say a small cap company is a company where the total value is less than, say, $300 million. That might sound like a lot of money, but it's really not. So a large cap company, if we take the other end of the spectrum, a large cap company might be, say, Apple in the United States, which is trillions of dollars. Or here in Australia, you might have Telstra, which is in the billions of dollars, or Commonwealth Bank, which is over $100 billion. Now, some people might add a further kind of like, I guess, line in the sand here. They might say small cap is below $300 million, a large cap is say up to $50 billion, and then anything over that is like a mega cap.
It's a really large range.
There's many ranges. Then you can go mid-cap if you really want to. but if you ask someone in australia what a small cap is that might say something below 300 million if you ask someone in the united states what a small cap is they might say companies below a billion so you can see how that kind of goalposts shift just because the companies over there tend to be bigger yeah because we talked about blue chips as in large cap stocks the other day on our jargon episode Yes, that's it. So in that episode, we talked about a few things you should be aware of. The first is we talked about market cap. And that was basically the total value of all shares in a company. So if you added up all the shares and the price of those shares, all of those, the value of that, that's market cap.
And we also talked about Blue Chip. And we said that Blue Chip shares were big companies with big brands and if not globally diverse operations, maybe nationally.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–10:37
2
What defines small cap companies in Australia?
10:37–22:52
3
What factors contribute to the volatility of small cap stocks?
22:52–24:55
4
Why does Owen prefer investing in small cap companies?
24:55–38:47
5
What is the importance of management in small cap companies?
38:47–41:17
Speakers
2 identifiedMore from Australian Finance Podcast
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