This is great David! Aligns pretty well with my philosophy. I find that when there are opportunities above the microcap threshold it's usually something to do with investor constraints (stock falls out of a major index; REIT converts to a C-corp etc) or disgust (ESG-unfriendly such as coal, tobacco or private prisons).
Nice article overall. However, I am not sure how applicable nowadays is the story of Buffett's trawling through Moody's Manuals back in the fifties/sixties. I think the microcap space is much more saturated now, and we also have algos/maniches constantly scanning the news, crunching the numbers, looking for inefficiencies for their automated strategies, even if the liquidity is small and the companies obscure.
You state that you do a lot of qualitative work and you also state that you don't mind companies that file in other languages than English. I assume these are sometimes languages which you don't speak. Does that mean you don't work with the company's Annual Report or do you attempt to translate information from the Annual Report? I attempted this myself with Google Translate and I noticed that the translations are often non-sensical, confusing or simply wrong. I was just wondering how you go about this.
What investing book did you recommended in the interview with Kostadin?
Impressive framework. Well thought out with a large focus on risk and lots of room for upsides.
One of my hurdles for investing is ‘no debt or very temporary with good reason or small debt like leasing’. It helps me be more certain about risk.
This is great David! Aligns pretty well with my philosophy. I find that when there are opportunities above the microcap threshold it's usually something to do with investor constraints (stock falls out of a major index; REIT converts to a C-corp etc) or disgust (ESG-unfriendly such as coal, tobacco or private prisons).
Love it! It is nice to see such a well articulated strategy. Well done
Nice article overall. However, I am not sure how applicable nowadays is the story of Buffett's trawling through Moody's Manuals back in the fifties/sixties. I think the microcap space is much more saturated now, and we also have algos/maniches constantly scanning the news, crunching the numbers, looking for inefficiencies for their automated strategies, even if the liquidity is small and the companies obscure.
Illiquidity is fine. But the real outperformers are probably the smallest 1-5% of all stocks. (with a market cap < 25 Mio. USD). see here: https://microcapclub.com/excessive-history-microcaps/
I too prefer investments where I have to be careful to not move the market when I buy or sell. Nice article.
Useful thoughts. Thanks for sharing this!
You state that you do a lot of qualitative work and you also state that you don't mind companies that file in other languages than English. I assume these are sometimes languages which you don't speak. Does that mean you don't work with the company's Annual Report or do you attempt to translate information from the Annual Report? I attempted this myself with Google Translate and I noticed that the translations are often non-sensical, confusing or simply wrong. I was just wondering how you go about this.