Beyond compare

Before you invest in small caps, it’s wise to look at some key yardsticks to assess companies in the same sector

‘It was like feasting with panthers. The danger was half the excitement.” So said Oscar Wilde, and his words are as relevant to investing in small companies as they were to his personal adventures.

It can be interesting to compare the returns from small cap investing to the returns from investing in large multinationals, but unless you are looking at businesses that are competing in broadly the same market, such comparisons may be ...