'A bull market for losers': A Wall Street expert blows the lid off a group of thriving stock-market 'deplorables' he says has no business drawing investment

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Vincent Deluard of INTL FCStone lays out a series of statistics that suggest overlooked weakness and vulnerability in the small-cap space.

, many of which he says are skating by and continuing to attract investment because of some unfortunate investor misunderstandings. At the center of his thesis is the overlooked fact that an inordinate number of small-cap companies are unprofitable — and have been for a long time.

Deluard surmises whether it's a coincidence that this outperformance occurred at a time when the value of bonds with negative yields exploded from near zero to $10 billion over the same period. It likely is not. An initial reaction one might have when presented with this data is to assume that the deplorable group is simply chock full of biotech companies, which are almost always money-losers until they have a drug breakthrough.

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