When you’ve been around small-caps for a while, large daily moves aren’t unfamiliar. Much of the time, they’re best ignored.

Shares in 8common (ASX:8CO) last month spiked by 29% in a single day after the business released an encouraging quarterly result. A nice gain, for sure, but one that was driven by less than $20k worth of trades. Shares are now back at where they started, near a multi-year low.

There can be a lot of false starts before the big money moves in (if ever).

Far less often do you see double-digit percentage moves in multibillion dollar, highly liquid stocks. And there’s been a whole gaggle of them lately.

Altium (ASX:ALU) and Audinate (ASX:AD8) — among some of the higher ranked stocks on Strawman — both surged over 20% in the wake of strong results. 

Wisetech (ASX:WTC), one of the top 20 largest companies on the ASX, saw a giant move in the other direction. Shares dropped a gut-churning 20% on Wednesday, erasing over $5.6 billion of market value in a single day.

Dominoes (ASX:DMP), Accent (ASX:AX1), Cochlear (ASX:COH), Resmed (ASX:RMD), Ramsay (ASX:RHC), Whitehaven Coal (ASX:WHC), and more besides, have made a lot of the volatility in small caps seem tame.

It’s not clear what meaning, if any, we take from it all. Perhaps it’s just a reminder that Mr Market can be just as fickle at the bigger end of town. And sometimes he’s a little more skittish than usual.

It certainly doesn’t help the case for a highly efficient market. 

One lesson, perhaps, is how returns can be delivered in a very uneven fashion. A shareholder in Altium would have measured their 3-year trailing return at 2.3%pa on Monday. The next day, the same exercise would have yielded a near 11% average annual return. 

That’s how it often goes: Gradually, then suddenly.

Though the share price won’t always reflect it, winners just keep on winning. The market can only ignore progress for so long, and sooner or later will be happy to pay up for quality. At the same time we’ve seen how even large and well-established businesses can suffer big, unexpected — hopefully temporary — set-backs. (Not a bad thing as far as patient and opportunistic capital is concerned.) 

At any rate, it’s doubtless we’ll see more big moves before this reporting season is done. And although we can’t hope to predict them in advance, we should at least steel ourselves for their inevitability.

Just remember, as Buffett says, games are won by players who focus on the playing field — not by those whose eyes are glued to the scoreboard.

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