Why Small Cap Stocks Should Outperform in 2011 [Video]

A number of smart money managers are betting that 2011with be the year that large cap stocks -- those with a market capitalization over $10 billion -- outperform the market. The reason? Small caps, which have a market capitalization below $2 billion, and mid cap stocks, with market caps between $2 billion and $10 billion, almost doubled the returns of S&P 500 in 2010, rising 27%. Large caps, on the other hand, were up only about 15% so they seem relatively cheap.

But Hilary Kramer, editor of GameChangerStocks.com, says not to be so quick to give up on small caps. In fact, she says that they will do very well this year. In the short video above, Kramer explains that small caps, which were destroyed during the credit crisis, should do well. She says that many could benefit by being acquired by larger companies such as Qualcomm's (QCOM) recent announcement that it will acquire Atheros (ATHR). In the video, Kramer gives a number of small cap stock recommendations. Among her picks: the publisher of yellow and white pages in print and online, Supermedia (SPMD).