Some investors like investing in small firms because it is an area where the natural strengths of a retail investor can really shine.
Institutional investors can't invest in some counters like Karin Tech and Global Testing because there is so little liquidity in these counters that it would be a struggle to even pick up more than 2000 shares in a single transaction.
The small firm effect is a well known in academic literature. You can earn higher returns if you focus on smaller stocks.
But there are some caveats :
a) Small firms might also be neglected firms
A large component of small firm returns is also attributed to its neglect. You may also have oversized returns if you invest in stocks which are not covered by analysts. I can't seem to get a lot of information on a counter like Figtree, for example.
b) Small firms are illiquid......