Mega-bank Wells Fargo does an excellent Small Business Survey each quarter, and I look forward to it. The latest is interesting on two points.
First, business confidence is now the highest since the Global Financial Crisis of 2008/9. While they are accepting limited upside in revenue, they are keeping a tight rein on expenses. (This is the main reason that business investment and hiring have been so slow to improve.) They don't foresee any recession in the near term.
This economic data point is often used as a guidepost for the health of small cap stocks. Right now, this latest survey reinforces the traditional notion that small cap stocks are more profitable in the long run, even if more volatile in the short run. Given the slowing economies of Europe and Asia, we can expect weaker performance from large cap stocks, relative to small cap stocks.
Second, 87% of small business owners are paying close attention to the presidential election, with 54% saying they understand the positions of the candidates "very well or extremely well." 72% expect their businesses to be impacted by the election.
This is interesting when compared to the latest University of Michigan survey of consumers, instead of businesses. 36% of consumers think the election makes no difference at all, Maybe, this difference between consumers and business can be explained by businessmen being more educated voters. Maybe, it is the paranoia of businessmen. Or, maybe not . . .
Things are not so bad . . . regardless of what the media says . . .
First, business confidence is now the highest since the Global Financial Crisis of 2008/9. While they are accepting limited upside in revenue, they are keeping a tight rein on expenses. (This is the main reason that business investment and hiring have been so slow to improve.) They don't foresee any recession in the near term.
This economic data point is often used as a guidepost for the health of small cap stocks. Right now, this latest survey reinforces the traditional notion that small cap stocks are more profitable in the long run, even if more volatile in the short run. Given the slowing economies of Europe and Asia, we can expect weaker performance from large cap stocks, relative to small cap stocks.
Second, 87% of small business owners are paying close attention to the presidential election, with 54% saying they understand the positions of the candidates "very well or extremely well." 72% expect their businesses to be impacted by the election.
This is interesting when compared to the latest University of Michigan survey of consumers, instead of businesses. 36% of consumers think the election makes no difference at all, Maybe, this difference between consumers and business can be explained by businessmen being more educated voters. Maybe, it is the paranoia of businessmen. Or, maybe not . . .
Things are not so bad . . . regardless of what the media says . . .
