We Study Billionaires - The Investor’s Podcast Network TIP431: The Big World of Microcaps w/ Ian Cassel
Mar 18, 2022
In this discussion, Ian Cassel, a co-founder of MicroCapClub and CIO of Intelligent Fanatics Capital Management, explores the often-misunderstood world of microcap investing. He shares why these stocks are overlooked and reveals that many successful investors started with microcaps. Listeners learn strategies for identifying promising microcaps and the psychology behind stock pricing. Ian discusses the merits and pitfalls of concentrated portfolios, alongside insights on finding companies with exceptional management for sustainable profits.
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Microcap Definition
- Microcap stocks are public companies with market caps below $300 million (or $500 million adjusted for inflation).
- They represent a significant portion of the public equity universe, roughly 48% of 24,000 North American stocks.
Retail Investor Advantage
- Microcaps offer retail investors a unique advantage as institutional investors often avoid them due to illiquidity.
- This allows individuals to discover and invest in promising small companies before they become larger and more accessible to institutions.
Sleazy Newsletters
- Many people's first experience with microcaps is through misleading newsletters promoting pump-and-dump schemes.
- Ian Cassel tracked 42 such newsletters, and all promoted companies that declined by 99% within two years.
