Lux Investing

what is the difference between a small cap and a large cap in investing?

Public Comments

1. the size of the net worth of the companies. Capitalization of a Large Cap Co may be in the hundreds of millions+, while a small cap may be just a couple of millions.
2. The market capitalisation of the companies. Mega-cap companies have a market cap over $200 billion, Large caps- between $10 billion and $200 billion dollars, mid-caps- $2 billion and $10 billion, small caps- between $300 million and $2 billion, micro caps- between $50 million and $300 million, and lastly, nano-caps - below $50 million. Essentially, a large cap is a "bigger" company than mid-cap. If you abide by the efficient market hypothesis, attempting to "pick winners" in mid, large, and mega caps, is a futile endeavour, due to the flow of information available. However, many believe that this does not apply to small, micro, and nano caps, but be aware that investing with less information can be a risky endeavour.