Tom Maher on Small-Cap Investing, AI Infrastructure and Opportunities Beyond Big Tech

Small and mid-cap investing offers significant opportunities despite a decade of large-cap dominance, driven by strong expected earnings growth and domestic economic exposure. Navigating this space requires a "two-footed" approach, balancing the positive momentum of the AI build-out against macro-level volatility and valuation concerns. Active management is essential because small-cap indices have become increasingly populated by unprofitable, non-self-funding companies, necessitating rigorous stock-level selection. Effective strategies involve thematic investing, valuation-based screening, and monitoring market momentum to identify companies capable of driving their own growth. Investors should prioritize management teams that demonstrate consistent capital allocation, clear communication, and the ability to adapt to changing industrial landscapes. Ultimately, success in small-caps depends on identifying companies with idiosyncratic potential rather than relying on broad index performance or simple mean reversion.