Small caps are teaching us something uncomfortable right now.
Last year, unprofitable Russell 2000 stocks ran 20% while the profitable ones limped up 10%. Classic late-cycle euphoria. Money chasing anything that moves.
This year? Almost perfectly reversed.
The market is quietly sorting wheat from chaff. It's not dramatic. It's not a crash. It's just... selection. The kind that happens when easy money stops being easy and people remember that profits actually matter.
This is how cycles turn. Not with a bang, but with a slow, grinding preference shift. Yesterday's lottery tickets become today's forgotten names. Yesterday's boring earners become today's safe harbor.
Watch what the market rewards. It tells you more than any headline.
Last year, unprofitable Russell 2000 stocks ran 20% while the profitable ones limped up 10%. Classic late-cycle euphoria. Money chasing anything that moves.
This year? Almost perfectly reversed.
The market is quietly sorting wheat from chaff. It's not dramatic. It's not a crash. It's just... selection. The kind that happens when easy money stops being easy and people remember that profits actually matter.
This is how cycles turn. Not with a bang, but with a slow, grinding preference shift. Yesterday's lottery tickets become today's forgotten names. Yesterday's boring earners become today's safe harbor.
Watch what the market rewards. It tells you more than any headline.
