Not since the dark days of 2008 has the spectre of macro-economic trends and global events had so much impact on small cap portfolios. I’m reminded of a quote attributed to Warren Buffett’s mentor Benjamin Graham who is reported to have said “the market is like your mistress, you can’t afford to ignore her completely but…” With this in mind we’re not ignoring our mistress, and we’re well aware that bond proxies and growth stocks will struggle short-term, and that cyclicals, banks and non-gold resources are going to run. But nor are we straying too far from our core business of finding undervalued, growing smaller companies. In this wire we discuss our approach to current market conditions, the sectors and themes we think could outperform, and mention five small-caps that we think look attractive following recent pullbacks.