For the past several months, small-caps have greatly outperformed large-caps. Many observers have derided it as a “blow off” of excess that will soon reverse, but researchers at the Leuthold Group disagree. Instead, they point out that similar periods of “extreme strength” have kicked off periods of multi-year leadership by small-caps. The chart below, from The Leuthold Group, shows that in every one of the 7 prior instances of a 25% total-return differential between the 6‑month returns of the Russell 2000 small-cap index and the S&P 500 large-cap index, the dominance of the small-caps continued for another 2 to 10 years. Thus, they argue that the surge in small-caps is more likely to be a “Kickoff” than a “Blow off”. Best regards, Womack Investment Advisers, Inc. WOMACK INVESTMENT ADVISERS, INC. Oklahoma / Main Office: 1366 E. 15th Street - Edmond, OK 73013 California Office: 4660 La Jolla Village Dr., Ste. 100 - San Diego, CA 92122 Phone (405) 340-1717 - Toll Free (877)
Jeff Bezos announced he is stepping down as CEO of Amazon, and that his replacement will be Andy Jassy, currently CEO of Amazon’s Web Services (AWS) division. Although all consumers know Amazon is THE behemoth in global e‑commerce, it would no doubt be shocking to most to learn that AWS is the biggest profit center of the entire company. Amazon’s most recent numbers revealed 2020 revenue of $386 billion. While AWS made up only 12% of that revenue number, AWS’ very comfortable profit margins meant it made up almost 60% of Amazon’s total operating profit! Under Jassy’s leadership AWS has become the clear global market leader, having captured almost one-third of the entire cloud computing market, and is more than 50% larger than second place Azure from Microsoft. (Chart from chartr.co) ( Sources: All index- and returns-data from Yahoo Finance; news from Reuters, Barron’s, Wall St. Journal, Bloomberg.com, ft.com, guggenheimpartners.com, zerohedge.com, ritholtz.com, markit.com, finan