Invest Like the Best with Patrick O'Shaughnessy Ian Cassel – Investing In Tiny Stocks - [Invest Like the Best, EP.24]
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Feb 14, 2017 
Ian Cassel hunts among overlooked microcap companies for exceptional, intensely driven owner-operators. He discusses how he finds promising businesses, evaluates their competitive advantages and leadership, and decides when to buy or sell. The conversation also explores concentrated investing, mentorship, surviving bear markets, and the frugal lifestyle behind his approach.
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Microcaps Are More Important Than They Appear
- Microcaps are misunderstood, but thousands of companies collectively employ millions and have produced many exceptional long-term investments.
- Cassel notes that roughly 80% of stocks gaining 1,000% or more over the prior decade began as microcaps.
Illiquidity Creates The Microcap Edge
- Illiquidity, rather than small size alone, creates the strongest opportunity because large institutional investors cannot easily participate.
- Ibbotson’s historical research found small illiquid companies outperformed, while small liquid companies performed worst.
Keep Your Investment Hurdle Extremely High
- Set an exceptionally high quality hurdle and avoid investing merely because a company looks acceptable.
- Cassel concentrates in four to six companies and waits years rather than rationalizing seven-out-of-ten ideas.