• Sees them as outperforming in an era of higher interest rates
  •  Cryptocurrency markets’ ‘resiliency has been extraordinary’

Ryan Jacob, a veteran of the dot-com boom-and-bust era who has worked his way back to the upper reaches of the fund-performance heap, isn’t worried about equities being expensive, though he expects smaller stocks to outperform heading into 2022.

“I don’t think we’re headed toward some imminent collapse in the markets,” Jacob, the chief executive officer at Jacob Asset Management, said in a recent interview. “We’re heading for a period where small caps are going to outperform large caps to a significant degree. And it has to do with interest rates” heading higher. He added that “it’s going to be a lot harder for the indexes to post big gains, because they’re so dominated by the large caps.”

Jacob, whose firm has around $330 million under management, said that fund managers’ main challenge in 2020 was which companies would benefit from the changes to our economy. This year it’s been about companies that can continue that success versus ones that saw unusual temporary benefits that may be harder to build on. Next year, as we return to normalization, the challenge will be how companies fit in.

The Jacob Internet Fund has seen some big ups and downs

His Jacob Internet Fund, which invests primarily in internet-related stocks, is in the top 5% of its peer group over one month, year-to-date and over a three-year time frame, according to data compiled by Bloomberg. He’s a survivor, associated with triple-digit fund returns in the late 1990s, only to see his flagship fund crater more than 90% in the dot-com bust, then work its way back slowly over the decades. Top holdings in the Internet Fund include OptimizeRx Corp., MongoDB Inc., Voyager Digital Ltd. and Twitter Inc.

Jacob’s views include: