Planet MicroCap Podcast | MicroCap Investing Strategies
It’s Not Necessarily Bottom Fishing Looking at MicroCaps with Paul Cerro, CIO of Cedar Grove Capital Management
Oct 24, 2024
Paul Cerro, CIO of Cedar Grove Capital Management, specializes in identifying growth opportunities in consumer and retail microcaps. He shares his journey from teenage market curiosity to Wall Street. Diving into microcap investing, he highlights the long-term growth potential and the importance of thorough research. Cerro discusses the risks involved, emphasizing a patient, adaptive approach to setbacks while harnessing social media as a tool for diligence. His insights provide a refreshing perspective on understanding businesses in their formative stages.
39:25
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Quick takeaways
- Microcap investing focuses on identifying companies with growth potential by understanding fundamentals rather than relying solely on undervaluation metrics.
- Engagement with the investment community is crucial for gaining diverse perspectives and critically evaluating investment opportunities amid market volatility.
Deep dives
Introduction to Microcap Investing
Microcap investing is characterized by focusing on smaller companies that have the potential for substantial growth rather than just picking stocks that may seem undervalued or 'bottom fishing.' An emphasis is placed on understanding business fundamentals, market conditions, and the specific factors that could drive growth for these companies. The speaker illustrates this with an example of investing in consumer goods and retail sectors, explaining that spotting potential in young businesses can lead to significant investment opportunities. This approach involves identifying small companies with growth potential instead of adhering to the traditional mindset of valuing all investments solely on quarterly performance.
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