The Sunday Ride #2 – April’21 (Small Caps)


The Sunday Ride brings a collection of Investment Research and Financial Independence topics for Long Term Investors with the aim of providing you the best reads.

To be enjoyed with your Sunday post-ride coffee.

While rebalancing your portfolio, learn how the markets work and get the highest quality insights from Wall Street and Main Street.

Unlike the rest of, this series is provided without additional guidance. 

As usual, everything is to be used at your own risk. 

Market Dashboard


A quick glance at where we stand Year-to-Date when you rebalance. Compiled specifically taking a Long Term Investor view. Updated throughout the year. Long term historical risk and returns are here

Year-to-date Market Performance

The key development this month was the rising CAPE Ratio – one of the ways of measuring how overpriced is the market (but far from perfect). 

It hit the highest level again (barring 2000-2001 period).

Rates stopped rising, and even went back 10 basis points which mechanically drove equities higher, especially NASDAQ up 5-8% depending on your currency.

If you are wondering what is the effect of currencies on ETF selection, I came up with a BoW Q&A earlier his week.

There is also a fresh BoW page related to BEST UCITS ETFs – including selection of Bond ETFs. Did you know that the factsheet yield for ETFs is misleading?

Inflation expectations have also stabilized, for the time being?


This section is dedicated to what really matters (aka the 90% of your Portfolio) – achieving Financial Independence, Asset Allocation and Long Term Investing Research.


Vanguard has published an interesting paper related to Global diversification of your Equity portfolio.

Yes, it is still very much relevant (especially for Eurozone Investors!) and currency hedging from European perspective made little sense, in the long run (page 9)

Equity Market correlations have been continuing rising lately shows Morningstar.

The second research paper from Vanguard is even more relevant from an early retirement perspective. In order to mitigate low yields Vanguards argues that neither of the following helps:

  • Higher Yielding Bonds
  • REITs
  • Dividend Stocks (sorry dividend-focused readers!)
  • Long duration Bonds (high quality, think TLT ETF)

They all fail due to either (i) overconcentration or (ii) increased risk, in the case of Bonds.

There is no easy solution to the low yield problem. Vanguard argues maintaining the asset allocation and diversification (think World ETFs) should intact but focus should be on tax efficiency and controled withdrawals (total return). 

Bottom line – stay the course, says Vanguard’s Strategist on Bloomberg TV.

Last, albeit not the most positive news, related Vanguard is its retreat from Chinese Market announced a few weeks ago “Shock and Tears: Behind Vanguard’s Retreat From China Market“, writes Bloomberg.

JP Morgan has released its quarterly Guide to the Markets – a must read for Long Term investors.

WealthManaged dives into actual returns you get from Corporate Bonds that promise a premium over Government Bonds

Something that I aim to cover in due course. In the meantime, listen to the 12 mins podcast.

Alpha Investing


If you decide to sin, then sin only a little. Active investing should be, at best, a tiny fraction of your portfolio (I tend not to exceed 10% of my portfolio). This section is dedicated to improving your knowledge about capital markets. 

What exactly is Market Volatility?

Here is a great thread illustrating volatility from 10-K Diver (or rather the concept of Beta) 

Featuring… the Golden Retriever but also a bunch of other dogs. Enjoy!

Small Caps

Whether a small cap premium exists is an ongoing discussion.

But, the fact remains that European Investors tend to be under-invested in US small Caps writes S&P.

This could be especially valid if you go for a Banker-type portfolio with only S&P 500 exposure.

Aviva also shows that Emerging Markets’ Small Caps have lower volatility with higher returns than large caps, something that is not very intuitive since investors are used to high vol in developed markets.

This could be due to (i) larger exposure to more stable markets like Taiwan or Korea and (ii) different sector exposure. Not without its risk, since Taiwan is the most dangerous place on Earth, according to the Economist.

Finally, non-US developed markets’ small caps offer the best playing field for active Stock pickers due partially to lower coverage, argues Putnam Investments.


Emerging Markets

The CFA Institute takes a deep dive into Capital Markets in India

Janus Henderson writes about China and Electric Vehicles

A December piece from Vanguard disects China’s ‘mirage of stability’.


Goldman came up with a research piece summarizing the volatility of crypto related stocks with over 1bn of market cap.

Not for the faint-hearted.

Active Investing - Orbituary

When you play with fire, you can get burned. This section is a stark reminder of what can happen when engaging in active investing, even as a professional.

Two of the biggest Short sellers are having a really tough time, writes Institutional Investor.


European Stuff


This section is dedicated to UK and European Index Investing. It can also touch on other jurisdictions outside the Euro-zone.

Amundi is set to become a European ETF giant. In fact, it will be the second largest manager behind BlackRock (iShares).

As announced earlier this month,  Société Générale was selling Lyxor and Amundi ended up being the buyer. 

There could be a mix of consolidation of their products but some less strategic ETFs may also close.  

If you do get such notification, it’s better to sell than wait for the liquidation, which means you may have to wait even a few weeks to get your funds back.

ESG, Digital or Crypto – Thematic ETFs are flourishing in Europe, writes but be mindful of the trade offs:

“There is a triangular trade-off between the purity of a theme, its diversification, and its liquidity.” 



This section is dedicated to the FIRE Lifestyle Movement and Cycling Topics (bikepacking, touring and useful reviews)

Financial Independence & Early Retirement

In Finance it’s often all or nothing. Jobs can take most of your time and FIRE seems particularly tempting. 

Here is an old one from Peter Lynch, one of the greatest investors on why he retired at 46.

I recently wrote about Time. Here is an interesting take on how to be Time-rich on the Rational Reminder podcast


Cycling in Japan

japan 00 islands

Here is a deep dive into cycling in Japan including:

  • Cycling the Japanese Alaska
  • Relaxing in the Japanese Hawaii

Not the most frequent visited Japanese Islands – have a look!

Garmin Varia, your additional pair of eyes

WhatsApp Image 2021-04-27 at 11.43.01
Garmin Varia 516, Radar and rear light combined

There is a special rung in hell for criminal drivers.

One of them is Brahim Bamous, mayor of El Hanchane near Essaouira (Morocco) that killed Alexandra Gonzales this month. He was driving on a 2+2 large motorway, without a driving licence and crashed at 100 km/h  into Alexandra despite her being on a dedicated cyclist lane

Since he’s an official, chances are he won’t experience any single day in jail. 

This is one of those cases where Garmin Varia, couldn’t have helped (nothing would have, except a responsible driver).

In other situations it may give you precious heads up.

Similar to how astronomers discover stars and police tracks your speed, Garmin Varia uses the Doppler effect to check cars behind you.

When would Garmin Varia be not very useful? 

In big cities, the number of cars make the signalling less effective.

When should you buy Garmin Varia? 

If you use quiet roads, climb mountains and then can’t hear much during descents.

It will also alert you on when not to cycle on aero bars.

So far, it has been proven quite useful in that:

  • It signals when there is incoming danger behind me (150 meters range)
  • Detects various moving vehicles – cars, most motorbikes, quads, even some bikes – need to try Moroccan horses
  • Signals car’s relative speed
  • Alerts on multiple cars. If you see two cars ‘overlapping’ on the screen, it means that they are using two lanes which is another interesting signal related to potential danger.

Even if you don’t have your screen turned on, it will alert you with a sound when something is spotted behind you. Like all devices, it’s not 100% accurate (e.g. I wouldn’t blindly trust the ‘all clear’ signal) but I already rely on it heavily. 

It allows me estimate drivers behaviour while still looking ahead of me. 

Highly recommended.

If every plane crash makes the next one less likely, every bank crash makes the next one more likely.

Nicholas Taleb


Market Dashboard


All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries or suggestions expressed or implied herein, are for informational, entertainment or educational purposes only. The information provided on is general in nature only and does not constitute personal financial advice.

Before acting on any information contained on you should consider the appropriateness of the information having regard to your objectives, financial situation and needs, and seek professional advice where appropriate. Read the terms and conditions.


If you have a question about investing, drop it below or if you found the work useful please do leave a comment or share it with someone that may benefit from it.


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About Raph Antoine 75 Articles
Raph Antoine is a Portfolio Manager and Institutional Advisor that witnessed first-hand the 2008 Great Financial Crisis and the 2011 European Debt Crisis working for some of the most prestigious names in the financial industry. Raph has experience across multiple asset classes including Fixed Income and Equity products as well as bespoke Investment vehicles in multiple jurisdictions. Raph holds an MSc in Financial Engineering and is a CFA (Chartered Financial Analyst) Charterholder. He usually rides one of his two bikes. Rarely, a Canyon Ultimate CF SLX 8.0 (that is currently in family's attic) and most of the time a Gravel Pinnacle Arkose (his favorite) that he used to Cycle the World.
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5 months ago

Hi Raph, it will be great to make deep analyse for investing in small caps and factor investing for Europeans.

I can found only one world small cap index. However, it is saying that the style is blended, I can see that is growth.

For value style, you need to make mix.

Last edited 5 months ago by Peter
5 months ago
Reply to  Peter

Agree. Factor investing with UCITS ETF is questionable:/

Last edited 5 months ago by Maciej
Beau W.
Beau W.
5 months ago

I always learn something new every time I read your stuff. Dam good information sir. Great job!

5 months ago

Thank you as always. You have been very productive this last week!
Cheers Bryan

Last edited 5 months ago by Bryan