The Meb Faber Show
Welcome to The Meb Faber Show, where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here.
Ian Cassel on The Art of Microcap Investing: Identifying Hidden Gems | #542
Today’s guest is Ian Cassel. Ian is the founder of MicroCap Club, which is a best idea generator and networking resource for the microcap space. Ian is also the CIO of Intelligent Fanatics Capital Management, which invests in small, illiquid microcaps. In today's episode, Ian gives an overview of the microcap space. He shares common mistakes people make when investing in microcap stocks, what he looks for when analyzing companies, and common characteristics he's found in multi-bagger stocks.
Key Points
- Microcap stocks often face negative perceptions due to associations with penny stocks and high risk, but many successful investors, including Warren Buffet and Peter Lynch, began their careers in this space.
- The opportunity for significant returns in microcap investing is high, as evidenced by the fact that 87% of companies that increased in value by 1000% or more over a decade were initially microcaps, with profitability being a key factor.
- Investing in microcaps requires a deep understanding of the companies and often involves looking for transformations such as new management teams with a proven track record who are investing their own money, which can indicate a potential for significant growth.
Chapters
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Transcript
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