The Case for MicroCaps and Why We're in the Early Innings of a New Cycle that Favors Smaller Companies with Doug Porter, Portfolio Manager and Senior Research Analyst at Acuitas Investments

My guest on the show today is Doug Porter, Portfolio Manager and Senior Research Analysts at Acuitas Investments. Doug and his team recently published a new white paper titled, "The Case for MicroCap." For most of you listening in, you're already a diehard MicroCap-per, and we've all succumbed to the altar to the merits of hunting in inefficient markets.

Having said that, I invited Doug on here to not only remind us why we are here, why we hunt for the best investment ideas in our neck of the woods, but more importantly, in my opinion, to showcase why in 2025, the case for investing in MicroCaps has merit as a place to build wealth and allocate capital.

Doug breaks down the structural inefficiencies and long-term opportunity in the micro-cap equity market — a segment that remains largely ignored by big institutions, but continues to be fertile ground for alpha generation.

We discuss why micro-caps have historically outperformed in 84% of rolling 30-year periods, the critical role of active management in filtering out the riskiest names, and why Doug believes we’re in the early innings of a new cycle that favors smaller companies.

Doug also explains how “Stable Operators” — profitable, cash-generating niche businesses — are among the most compelling yet overlooked opportunities in today’s market, and why a dedicated micro-cap allocation can offer diversification, M&A upside, and even a liquid alternative to private equity.

Finally, we cover Acuitas’s approach to identifying skilled micro-cap managers across the globe — and how this ecosystem of small, research-driven funds continues to uncover value where few others are looking.

For more information about Doug Porter and Acuitas Investments, please visit: https://acuitasinvestments.com/

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