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wasn't sure where to ask this, but this place seemed as good as any, especially considering RMs usually have pretty hefty market caps...

here's my thing: i realize there's a lot of advantages to being a big company, but how do get past the giant yearly revenue and mammoth market caps?

in my mind, a company valued at $100 billion with $20 billion in sales (and subsequently, my return on investment) is gonna have one heck of a difficult time doubling and tripling from there, no?

anyone around here who bought one of the 10 largest companies at the time, say, 5, 10, 20+ years ago? what were your original expectations, and what's your return been since?


My 2¢

This question comes up quite a bit. Intuitively you would think that there is a limit to how fast a very large company can grow. I don't have exact figures, but I'd say your basic thought that the top 10 companies in market cap won't grow as fast as an "equally" good set of mid cap companies. Soooo... all you need to do is to find 10 mid-caps that are "as good as" the 10 largest cap companies and you should be able to beat the 10 largest cap company's stock performance.

On the other hand, the large cap companies in a sense have proven themselves. So, perhaps there's less risk to investing in them. And as we all know, where there is less risk there tends to be less growth potential.

On the third hand, I wouldn't just use market cap to make my investing decisions.

Fool On,

Keith O'Malley
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