Whit Huguley, portfolio manager at River Oaks Capital and microcap specialist, shares his insights into the overlooked world of microcap investing. He emphasizes the importance of finding A+ CEOs and building personal relationships for a competitive edge. Discover why boots-on-the-ground research can reveal hidden value and the significance of investing in niche markets. Huguley also offers strategies for navigating the inefficiencies of microcap markets and highlights how market volatility can present unique investment opportunities.
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Whit Huguley's Microcap Journey
Whit Huguley transitioned from working at a startup and in private equity to focusing on microcap investing.
He realized microcaps were inefficient markets where hands-on due diligence could uncover value.
volunteer_activism ADVICE
Find Ideas Through Networking
To find microcap ideas, build a strong network and conduct boots-on-the-ground research.
Avoid relying solely on screenings or analyst reports as microcaps often have quirks missed by traditional methods.
insights INSIGHT
Importance of Long-Term CEO Focus
Microcap investing demands a long-term mindset with ownership stakes often between 1% and 5%.
CEO quality drives 90%+ of the investment outcome in microcaps versus more numbers-driven large caps.
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Why Some Companies Make the Leap... and Others Don't
Jim Collins
In 'Good to Great,' Jim Collins and his research team investigate why some companies achieve long-term greatness while others do not. The book identifies key concepts such as Level 5 Leadership, the Hedgehog Concept, a Culture of Discipline, and the Flywheel Effect. These principles are derived from a comprehensive study comparing companies that made the leap to greatness with those that did not. The research highlights that greatness is not primarily a function of circumstance but rather a result of conscious choice and discipline. The book provides practical insights and case studies to help businesses and leaders understand and apply these principles to achieve sustained greatness.
The intelligent investor
Jason Zweig
Benjamin Graham
Written by Benjamin Graham, 'The Intelligent Investor' is a seminal work on value investing that has inspired millions since its original publication in 1949. The book emphasizes the importance of distinguishing between investing and speculation, calculating the intrinsic value of companies, and maintaining a margin of safety. The revised edition includes updated commentary by Jason Zweig, who provides modern examples and insights to help readers apply Graham's principles in today's market. Warren Buffett, a disciple of Graham, has praised the book as 'the best book about investing ever written'.
Join us as we explore the overlooked world of microcap investing with Whit Hughley of River Oaks Capital. Discover how finding A+ CEOs in obscure, fragmented markets can lead to exceptional returns. Learn why boots-on-the-ground research and personal relationships with management teams create a competitive edge in this inefficient market.
[00:00:00] Welcome to microcap investing discussion with Whit Hughley.
[00:01:00] Whit's journey from startup to private equity to microcaps.
[00:05:00] Microcap advantage: First investor visiting companies in years.
[00:08:00] "Suggestive investing" helps unlock value in undervalued companies.
[00:14:00] Finding ideas requires networking, not screening like large caps.
[00:19:00] Seek obscure markets where competitors can't justify entering.
[00:25:00] A+ CEOs know strengths/weaknesses and speak business-owner to business-owner.
[00:35:00] Look for hidden non-core assets often missed in valuations.
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