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Is Size Really Everything?

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Source : Ken French, JQR Capital Is Size Really Everything? In certain parts of life, size is a stereotypical measure of success - the size of your house, for example. The amount of land in your name. The speed of your new car. In the investment world, the ending value of your portfolio may be the ultimate measure of financial success. I often remark to my clients that when we think about the long term (translation: decades), the short term decisions are both trivial and easy. Some quantitative investment professionals (AKA quants) have hundreds of individual factors in their quiver of data from which to discern long term patterns - or payoffs. A factor is the investing term for an individual piece of measurable data for a stock. In this discussion, we will focus on seven factors published by Professor Ken French on his website. What Can We Measure? Yahoo Finance data allows us to look at about 123 individual pieces of data for each stock in our universe. As a reminder, market capitali