On July 15th 2014, The Federal Reserve uttered the following warning to exuberant equity investors, “Valuation metrics in some sectors do appear substantially stretched — particularly those for smaller firms in the social-media and biotechnology industries.” 5 months later, Yellen Capital LP is half right…

As Bloomberg reports,

Social-media shares declined after the report, as shown above, which tracks the performance of the 10 smallest U.S. companies by market value in the Solactive social media Index. They fell 15% as a group through yesterday, judging by an index that was equally weighted as of June 30.

Smaller biotech companies, on the other hand, rebounded from an initial slump. The Wells Fargo Biotechnology Small Cap Index, used in the chart, climbed 37 percent through yesterday. The median market value for the indicator's 170 companies is $401 million, compared with about $1.5 billion for the social-media stocks.

The broad Russell 2000 small-cap index is up just over 5% since the Fed's warning.

Of course, we must always remember the Fed's follow-up explanation:

there's no sign “we are obviously in bubble territory”

And Yellen:

Can't Detect Asset Bubbles With Any Certainty