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Exactly. I think that the underperformance of large caps may be currently driving the simultaneous outperformance of both 5-Star and 1-Star stocks (and it wouldn't surprise me if 2-, 3-, and 4-Star stocks were outperforming, too). Ultimately, it may mean that knowing a stock's market cap class may be more informative than knowing its CAPS Star status, which would be a sad state of affairs, in my opinion.

 

I think the CAPS cognoscenti will eventually have to consider alternative benchmarks in describing/evaluating the performance of CAPS ratings. There may even be a need for normalizing CAPS ratings based on market cap classification and the performance of that class, but that's a complex step that I wouldn't take unless the data bear it out.

 

By the way, I also can't wait for dividends to be included. You're right - it will be interesting to see if and how that affects the CAPS ratings. I think such effects would happen indirectly, as it would primarily affect performance calculations, which could very well push some players into or out of All-Star status. In turn, that would affect the star ratings of the stocks those players have picked.

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