Jay Kaplan on Asset TV’s Small-Cap Masterclass—Royce
article 10-17-2018

Jay Kaplan on Asset TV’s Small-Cap Masterclass

Portfolio Manager Jay Kaplan joined Asset TV's Small-Cap Masterclass to discuss value in small-cap technology, being a “technology pick and shovel” investor, rising rates, and the prospects for small-cap value in 2019.


Portfolio Manager Jay Kaplan joined host Laura J. Keller and three other small-cap professionals on Asset TV's Small-Cap Masterclass, which aired Oct. 16, 2018, to discuss the effects of escalating trade tensions, current opportunities, and prospects for the coming year.

Watch Jay's appearance here.

Jay discussed how small-cap growth has outperformed small-cap value for about three years now, and how increasing interest rates may reverse that. He added that he views himself as a “technology pick and shovel” investor. He believes the next technology down cycle won’t be as long or as deep as a result of increased demand by automobiles for electronic content. “So I think, if you look hard there's a lot of value in small cap technology,” Jay noted.

With regards to prospects for 2019, Jay said investors should remember there can be unexpected market hiccups, which could include the mid-term elections, inflation and lack of liquidity. However, he believes value stocks have the chance to outperform small-cap stocks in the next leg.

“Here’s how we think about the world at Royce,” Jay added. “We try and buy companies with really good balance sheets and good financial strength. So if they get into trouble they don’t go away. And that's important in small caps, I think. We look for companies that have proven track records of good returns, whether that's return on capital, return on assets, so companies that earn well, and then we try to buy them when they're on sale.”

Watch Jay's appearance here.

Bio of Jay Kaplan

Jay Kaplan has been at Royce & Associates for 18 years, and he is a portfolio manager for five funds at the Firm. Prior to joining, he spent 12 years with The Prudential, most recently as Managing Director and Portfolio Manager. Mr. Kaplan holds a bachelor's degree from the State University of New York at Binghamton and a Master of Business Administration from New York University. He is a CFA® charterholder.

Important Disclosure Information

The thoughts and opinions expressed in the video are solely those of the persons speaking as of September 12, 2018 and may differ from those of other Royce investment professionals, or the firm as a whole. There can be no assurance with regard to future market movements.

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