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From Inverstorsinsight.com Meaty Beaty Big and Bouncy by James Montier No, not a description of my stomach... although thinking about it, it could be. Nor does it purely reflect my love of The Who. Rather the chosen title is meant to reflect upon the opportunity created by recent performance of small caps. But before dealing with the tactical outlook for small caps, I want to examine the strategic arguments used for small cap investing. A popular (well at least popular with me) TV show concerns two 'mad' scientists who love nothing more than to explode urban myths. For instance they have investigated the possibility of death by urinating on a live railway line! We could do with something similar in finance. We have a bad habit of accepting theories as fact within finance, of accepting statements as if they were truths. Even when we do bother checking the data we rarely seem to update our prior beliefs in anything other than a biased fashion. The myth of the size effect Way

The Limitations and Necessity of Naval Power By George Friedman It has now been four years since the fall of Baghdad concluded the U.S. invasion of Iraq. We have said much about the Iraq war, and for the moment there is little left to say. The question is whether the United States will withdraw forces from Iraq or whether it will be able to craft some sort of political resolution to the war, both within Iraq and in the region. Military victory, in the sense of the unfettered imposition of U.S. will in Iraq, does not appear to us a possibility. Therefore, over the next few months, against the background of the U.S. offensive in Baghdad, the political equation will play out. The action continues. The analysis must pause and await results. During this pause, we have been thinking about some of the broader questions involved in Iraq -- and about the nature and limits of American military power in particular. We recently considered the purpose of U.S. wars since World W