The Compound and Friends - The Quantum Realm

Episode Date: June 30, 2023

On episode 99 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Ian Cassel to discuss microcap stocks, the state of the economy, how to analyze a company's management team, how investing is like golf, Silicon Valley on drugs, and much more! This episode is presented by Jack Carr's new high-adrenaline thriller, Only the Dead. Pick up your copy at: https://www.simonandschuster.com/books/Only-the-Dead/Jack-Carr/Terminal-List/9781982181697?utm_source=the_compound&utm_medium=atria_display_ad&utm_content=&utm_campaign=only_the_dead_ad Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

So, Ian, are you Pennsylvania? I am. Lancaster, Pennsylvania. Lancaster? Amish. Very Amish. So my dad used to take us there when we were kids. Okay. I did a lot of, like, car ride vacations.

Yes. You know? Kind of like staycation slash... Yeah, like, we did, like, Boston and D.C. And we never went to Aruba, you know? Right. But I did Lancaster a bunch

Dutch Wonderland is that the local I was just there last weekend oh yeah that's a great spot I mean honestly if you have a few kids under the age of

10 it's like the perfect spot is that by because Hershey owns them and so it's pretty high quality I can't remember if we drove past so we did Hershey with the boys

three four months ago yeah it's wonderful yeah like it was the roller coasters were great like for grown ups how old are your kids So we did Hershey with the boys three, four months ago. Yeah. It's wonderful. Yeah. The roller coasters were great for grownups. How old are your kids now?

Six and four. Yes. So we were there two weeks ago. We're doing these staycations like this year. They have like badass roller coasters. Oh, Hershey's? I went by myself on a few. Hershey's big time. Yeah.

Yeah. And then Dorney. But it's kind of far. It's like a four-hour drive. Yeah, from here? It's kind of far. It's like a four-hour drive. Yeah, from here? It's kind of far. Yeah. Because it's such a quick turnaround, but...

Stay at the... You stayed at the Hotel Hershey. It's amazing. Yeah. We stayed at the Hershey Hotel. Yeah. That's the perfect... That's where we stayed, too.

That's pretty cool. It was great. And the indoor water park was fun. Yeah, I think they like roller coasters. Did you get the chocolate beer? They have chocolate beer? I don't know if I want chocolate beer. They have chocolate beer? I don't know if I want chocolate beer. They have chocolate beer?

I didn't know that. There's a restaurant right at the Husher Hotel that has served chocolate beer. I had a chocolate martini, like maybe with Reese's or something. Yeah, that's their go-to, I think. Yeah, it was good. Forced one on my wife, so, yeah. All right, close this, close this. Yeah, but Dutch Wonderland's pretty good.

I think in the last year, they started serving beer at Dutch Wonderland. Oh, yeah? Yeah. Husher served beer., close this. Yeah, but Dutch Wonderland's pretty good. They even, I think in the last year, they started serving beer at Dutch Wonderland. Oh, yeah? Yeah. Hershey served beer. It was great. Yeah, yeah. So you get through the day there.

My kids are too young. Hershey Park, they last like two, you spend like 500 bucks to go there, and then two hours into it. How old are your kids? They are seven and five. Okay. So it's right in that,

and they last about two hours, and it was hot, and they're just like, let's just go that. And they last about two hours. And it was hot. And they're just like, let's just go back to the pool at the Hotel Hershey. I was like, yeah, I'd rather do that too. I guess my kid. You stayed at the Hershey Hotel. I loved it. Yeah, it's pretty good.

I never made it to Dutch Wonderland. We were just talking about that. Or Sesame Place. So are there. Whenever you want this, it's going to be right here. There's like horse and buggies, right? There are. In Lancaster, there are.

Yeah. But you can go through the whole county without seeing one. Like they're kind of in their own little communities. Is Lancaster by intercourse? It is. Yes. Intercourse is in Lancaster. Gentlemen, it's a family chef.

And Blue Ball is another one. All right, enough. And a bunch of other ones. Hey, you might have noticed that I'm wearing my Goat USA apparel. So we had said something maybe a little bit not nice. In honor of independence, sir. We? The flag.

We said something? I might have said something that was not very nice. So let me defend myself a little bit and shout out to GOAT USA for sending us, honestly, very comfortable t-shirts. Feels very nice, right? Not to brag, these really emphasize my pectoral muscles, which is good. Feel this. But I said that Goat USA was for 12-year-old boys.

And the reason I said it is because they open a store in Roselle Field Mall and my kid has a hundred articles of clothing from Goat USA. And it's him and his friends that I see wearing it the most. But I want to set the record straight. Goat USA is for it's him and his friends that I see wearing it the most. But I want to set the record straight. Goat USA is for everyone. For everyone.

Including me. You know what Chris said to me yesterday? He goes, why did Goat USA send this stuff? We're not lacrosse players. I was like, what are you talking about? Chris is hell-bent on this idea that they're a lacrosse brand. Because he sees his son's friends wearing it. Well, that's—

So I made the same mistake. It's like, oh, it's only little kids wearing it. But apparently not. Apparently not. And you're never too old to be a kid. What's that? You got some books? I brought some books.

For what? He's going to read them to us. Yeah, I was. This is like... Literally, it was on my desk. And, you know, I saw the last segment. And I was like, I'll just bring what was on there. So this is Jesse Livermore's favorite book.

Oh, my God! Really? Yeah, it was written in 1880. What is it? Jesse Livermore's favorite book? Yes. As a fine art and thoughts on life. I never heard of that.

Yeah. Who's that a picture of? You don't recognize Dixon Watts? That is Dixon Watts, obviously. The Dixon Watts? Yeah. He was the chairman of the Cotton Exchange back in like 1880 or something like that. But the great thing about books on finance pre-1920 is they're like 30 pages.

So you can like burn through them pretty quick. There wasn't that much to say. There wasn't. Yeah. Also, lifespan was like 50 years old. So you don't have that much time to read them. Yeah. And you can, if you search that on Google, there's plenty of PDFs you can pull down.

Not only is it 30 pages, but it's for like an eight-year-old. This is for an eight-year-old boy. I love an eight-year-old. Virtue is its own reward. So is vice. This feels biblical. Tyranny is the vice of a brutal man. Submission to it, the vice of a timid man.

I've been saying that about you. Haven't I? That sounds like a tweet. I've been saying that about Josh. The best part is like the first six pages. That's pretty good. So I brought that one just because it was there. And you know.

What else do you bring? Are these gifts or what? No, I brought. You get this kid. What else did you bring? No, but what's the purpose of the books? I brought each. What was for the last segment of the show?

He's going to tell us about the books. Oh, reading. Slow down. I'm not actually going to read them. I jumped the gun. I jumped the gun. But you brought gifts? I did.

We love gifts. Yeah. Where did they go? We had them. Yeah, they're right here. Oh, let's see. Let's them. I jumped the gun. I jumped the gun. But you brought gifts? I did. We love gifts. Where did they go? We had them. Yeah, they're right here. Oh, let's see. This is really nice. So you're like from the chocolate capital of America, basically, right?

It really is, yeah. So this. What's this chocolate here called? These are called Wilbur Buds. So Wilbur Chocolate is the second oldest chocolate company in the country. You had Mike at Buds. Yes. Okay.

I could tell. His eyes lit up. There's at Bud's. Yes. Okay. I could tell. His eyes lit up. There's none of that in them, though. I'm listening. And so these Wilbur Buds actually predate the Hershey Kiss. They were actually wrapped in foil originally. Oh, look at that. It's the same shape as a Kiss.

In 1890, they came out. So I think Hershey Kiss was, I don't know, 1910 or something like that. Okay. My father-in-law worked at Wilbur Chocolate. So this chocolate company is right in the heart of our small town in Lidditz, which is, I think it's on there somewhere. Oh, you're going for it right now? I want to, yeah. What's the name of the cool little concert venue in Lancaster?

Yeah, so another cool thing, Lidditz, where I come from, is, I don't know, last three out of 10 years. It's the coolest small town in America. And one of the things is because of this chocolate company, the whole town smells like chocolate. It's right in the little town. The second reason is Claire Global and Tate Towers, which are the largest concert, are the ones putting up the staging equipment, the lighting for all the big concerts internationally from Jay-Z to Taylor Swift to Elton John. They're the ones behind it. It originated out of this small town of Lidditz. They built a $200 million complex right out of town. And so the little airport of Lancaster is always having Taylor Swift flying in, Elton John.

They have this huge area where these artists can come in and perform, like literally how they do in stadiums, but just to practice. It's the largest venue in the world. And so you can literally go to the pub that's in Lidditz, you see these random amazing artists just walking in having a beer. That's incredible. Stuff like that. That's so random. It is. Of all the places. I guess it has to happen somewhere.

Yeah. And I think the other random thing that makes it cool is I think we have – I think it's the third in the United States Rolex production factory right in town. In Lidditz, Pennsylvania. How nearby that is Banshee? I don't know. Where is Banshee? I don't know. It's a TV show. I don't know. Where is Banshee? I don't know. It's a TV show.

I don't know. Maybe it doesn't exist. These are really good. Which one? Did you have the light one? I'm a milk chocolate guy. Nicole, did you taste one? No.

Now, why is Hershey Hershey and this is this? Like, there's got to be a great business story there. There is. I mean, this company got taken over by, I don't know, three or four different people over the last hundred years. Now, it's owned by Cargill. So they came in and, because they're like the dominant player now in chocolate

like they are in anything food, you know, Cargill. Now how much THC is in these? This is not enough for Michael. How many milligrams would you say in what I just ate? I'm surrounded by people eating the chocolate mushrooms now. Literally, to go out to dinner, it's too much for me. I don't do it, Like, literally, like to go out to dinner.

It's too much for me. I don't do it, but like I don't like to be around it either. You haven't done it with Elon Musk? No. He's not ketamine. That's like a whole other thing that we can get into. Wait, but you microdose chocolate. No, I don't do any of that shit.

Physical chocolate. Yeah, no. Actual chocolate. No, you macrodose. I macrodose. That's right. Nailed it. Nailed it.

Thank you for that. All right, how are we looking? Ready to click it up? We're good. Yeah? All right, let's do the show already. This is an important man. Let's get rolling.

Hey, John, what show is this? Josh? Express 9. Episode 99. Oh, my God. Episode 99? episode 99 oh my god episode 99 welcome to the compound and friends all opinions expressed by josh brown michael batnick and their castmates are solely their own opinions and do not reflect the opinion of redholts wealth management this podcast is for informational purposes only and should not be relied upon for any investment decisions.

Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Hey everyone, it's me, downtown Josh Brown. I'm here with my friend, Rob Passarella, and we wanna tell you about probably the book that you should be reading this summer. This is Only the Dead by Jack Carr.

You are fired up about this book. Tell us why. Josh, there's no reason not to be fired up, right? You have to really enjoy it. Long story. Okay. Yeah, could be. Could be.

Jack Carr is one of those authors in the thriller space now. Unbelievably hot. This is his sixth book. Okay. He's done this six times already. Okay. And every time it gets even more intense. What's his background? Jack was a Navy SEAL for 20 years. Okay. Like serious. Like this is like

real Navy shit. This is a guy who was in the middle of Afghanistan, Iraq, the whole bit. Okay. So the story is also been turned into a Chris Pratt series on Amazon Prime called The Terminal List. Is that based on one of the first books in the series? That's right. The first book was basically a vengeance story, if you will, of getting even for the main character, who's a guy by the name of James Reese. In his case, his team gets wiped out, and of course, it's a secret conspiracy,

government cabal, and business, and the whole bit. You love the book? Love the book, love the author. So the book is called Only the Dead, written by Jack Carr, Rob Passarella's favorite author of the moment. And this is available where? Everywhere? Everywhere, obviously. And there's a link in the show notes. It's actually going to point out where you can get it from Scheinman

and Schuster. Okay. I will be reading this this summer. Rob might even read it again. Is that true? I've read them all, so I might have to read it again. All right. Thanks so much. Thanks so much. And please check out Only the Dead by Jack Carr. Ladies and gentlemen, welcome to the compound and friends. This is going to be an episode where we talk about things that we really have never gotten into before. We're not going to spend an hour on the Federal Reserve. We're really going to get into investing and the nitty-gritty of investing as viewed through the prism of micro-cap stocks.

We have with us today one of the foremost experts on the asset class. Is that fair? Could I say that? You know, in the top 30. Top 30? Yeah. Oh, one of the top 30 experts on micro-cap investing in America. I'm going to bump you up.

I'm going to say top five. All right. Because I don't know any of the other 29. Or maybe I do, and I don't realize it. They're all living in their parents' basements. That's right. Okay. Ian Castle is a full-time micro-cap investor

and the CIO of Intelligent Fanatics Capital Management, also the founder of Micro-Cap Club. Ian began his investing career as a teenager and learned from losing his money over and over again. Was Michael your mentor? Today, Ian uses his past experiences to teach people about the value in microcaps and believes that the key to outsized returns is finding great companies early because all great companies started as small companies. True. Very few fully formed. Even the FANG stocks were microcaps at

some point. They might not have been publicly traded, but that's a very important point, I feel like. No, it is. I mean, it's one of those things you can't deny. Like every company started with a small one. Okay. I want to talk about your backstory first, because the question is like, why microcaps? Why should anybody pay attention to the space? So why don't you tell us about how you got started investing in microcap stocks? So my origin story started when I was a teenager. So to date me, I'm 42. Radioactive spider bite. Exactly. And then? Just started making money. Warren Buffett bit him on the neck.

Yeah. Thank you. Hey, Buffett started at microcaps too, but we'll get into that. But started in, so this is like late 90s dot-com bubble. I was 16. My parents sat me down and said, we'd save for you around $20,000 for your college education. This is all you're getting. We want you to know when you're a sophomore, junior in high school, we'll open up an account with our financial advisor. We'll plop it in there.

Whatever you want to do to it, you can. But this is all you're getting. So you can go in debt if you want. So basically, the advisor kind of this is all you're getting. So you can go in debt if you want. So basically, the advisor kind of introduced me to small cap companies, and that was the best time to get introduced to them. This is Ed Jones? Yeah. Is a broker at Ed Jones? Yeah. Okay. So anyway, so I ended up putting that

$20,000 into about three stocks, and over the next four years or so, turned the $20,000 into $120,000, thinking it was skillful when it was 150% luck. Can I jump in? Sure. How did you not sell or how did you not trade? Because I feel like most novice investors, the first thing they do is they trade. So how did you have the discipline like at such an early age to let something, let 20,000 run up to a hundred and not sell it like 30? Maybe it was because I just was so inexperienced. Like I was just like caught, you know, bit by the greed bug. So I just like, let it run, you know, every day goes up. I mean, yeah. So tell people what timeframe that is. Cause that's a good, great question,

Michael. It's important to point out this is late nineties. Yeah. You never felt like you needed to sell. No, there was no point. It was just like, it's just going to go up tomorrow. Yeah. So it doesn't matter. Yeah. You know, so that's, that's, that's how it was. And so by the time I graduated high school, which would have been 1999, I said, well, I really don't want to waste this on a college education. I'll just go to a local university, work almost full time, commute. In the chocolate mines. Yes. In the chocolate mines.

Digging out the chocolate. Yeah. Okay. And so that's what I did. And so I went to a local university. I was able to kind of pay for it as I went. And then when I basically was working for a financial advisor then, Edward Jones, during college. And I was basically a branch office administrator, glorified receptionist, answering the phones.

And when that bubble popped, you know, that $120,000 turned into about $8,000. All those small cap tech stocks I owned turned into micro caps on the way down. That's how I got baptized into the micro cap ecosystem. You went in backwards. Yeah, exactly. Started out in small caps. They just became micro caps. The second thing that happened was I always thought I was going to be a financial advisor.

The gentleman that I was with, he had a decent-sized business. I thought he was going to goodnight me some assets, open up a branch five miles down the road and sing Kumbaya, but kind of dealing with people's emotions during the downdraft of that time period. You know, I kind of came out of that saying, I don't really want to deal with other people's emotions at all. Oh, because right. You're answering the phones. You already see what that, you already see what that world is. And maybe that's not the world that you want it to be in. Yeah. And so basically the 120 turned to eight and I started looking at microcaps because I owned a few. And the first one I really looked at in earnest was XM satellite radio, which kind of was the predecessor to Sirius satellite radio. And in fact, XM was sort of the first one here

in the United States to launch a service. But back in 2001, 2002, it was a microcap and had about 2 billion in debt from launching these satellites up into space. They had no really any real subscribers at all. And the stock was 41% held short. So everybody was betting that was going to go bankrupt. But, you know, again, this is 2001. You know, it's hard for people to remember, but terrestrial radio, you drive 20 miles out of your local area, you lose a connection, you have to find a new station. You know, I love the story of just thinking about crystal clear radio nationwide was appeasing to me.

So I fell in love with the story. It was a story stock. I saw that Hugh Panera, the CEO of XM Satellite Radio, was presenting up here in New York. Again, I'm from Lancaster, three-hour train ride or bus ride away. And I called up the conference organizer. And I was a, would have been maybe a junior in college. And I said, Hey, I'm Ian Castle with Castle Capital. I made that up. Is it okay if I come to your event? And they said, Sure. You know, I'm like, Oh, okay. So you know, put on my

suit that I wore for my high school photos. Luckily, I still fit into it. I had some fake business cards made and took a bus up here to New York. And long story short, I was able to weasel my way into a one-on-one with the CEO for about 10 minutes before he had his next institutional one-on-one meeting. He's like, who is this child? Oh, exactly. Yeah. My eyes were as big as saucers. And so spent 10 minutes talking to him, kind of came out of that experience just saying, oh, wow, I just want to buy this stock. So I ended up taking the bus ride home, putting $8,000 into XM at $1.78 per share. And almost immediately, you know, they started refinancing their debt, started signing other car manufacturers.

What did you say to the CEO that made him do that? Do what? He made it go up, right? Yeah, it was only that easy. So anyway, it ended up going from $1.78 to $34 per share in 14 months. Which most people will invest an entire lifetime and never have that experience. And you had that at 20 years old. Yeah. And it was mainly due to the short covering rally because like 40% held short. Whatever, still counts.

It still counts. That's right. I didn't hold it obviously the whole way. And then it later merged with Sirius. And then Sirius is now kind of the one that everybody hears about. But it really started with XM back then. And so that's what kind of started my love affair with these small public companies, that the ability for a moron like me to sit across the table from a CEO of a public company

and actually gain knowledge, qualitative knowledge out of that. Because that CEO is more likely to talk to you than the head of like Infinity Broadcasting or whoever were the giant radio companies at that time. Exactly. Or anybody, anybody over a billion dollar market cap. Are there big differences between investing in companies with the market? How do we define microcap by the way? So hold on, let's, let's get into, let's, let's set this up. What do you mean? Hold on. I can size up the space for you. You're asking the right, you're asking the right question, but it's just not coming out of your mouth. I can size up the space for you.

You're asking the right question. But it's just not coming out of your mouth. No, no, no. I want him to tell us. So size up the space in terms of how many companies are there, what is a micro cap definitionally, and how big is the market cap overall of all of these companies combined? Yeah. So here in North America, so U.S. and Canada, there's roughly 23,000 stocks that trade publicly. Around 10,000 would be considered micro-caps. So half the market.

Almost half the market is. And that's sub 500 million market cap. So 500 million market cap or less. Micro-cap is 500 million or less. Yeah. It depends if micro-cap is in vogue or not. Some people inch it up or inch it down if it's not. But usually it's around 500 million.

So half the number of companies but probably less than one half of 1% in market cap? So if you would take all of those microcaps in the US and Canada and roll them up

into a holding company, it would be about $600 billion in market capitalization. Oh, okay. So it's not nothing. Yeah. I mean, there's eight publicly traded single companies

today that have over that type of market cap. So it just shows you kind of how big and how small it is. I mean, as a whole, too, just another little thing is I think last time I looked, there was about 2.1 million jobs supported by microcap companies in North America. And that's as many as Walmart. Wait, 2.1? Million. For all microcaps?

All microcaps in North America. Yeah, so these are small. They're not just small stocks, they're small businesses. You said that 7,500 of the 23,000 public stocks in America are actually sub 100 million. Yeah. So there's 7,500 of the 23,000 that are actually sub 100 million. Micro, micro, nano caps. That would be, yeah, considered nano caps. And that's really, sub-100 million is when you really start seeing no institutional awareness of those companies. And that's also kind of the benefit to the student investor.

When I was a retail broker, that was the shit that we were taught to sell. Nano caps. And we made a market in them. Five firms, all on Long Island, maybe one on Staten Island. We controlled. And Boca. Yeah, and a couple Staten Island. We controlled – And Boca. Yeah, and a couple in Boca. We controlled the market.

I say we. I had no idea. The trading desks in those firms controlled the market cap because there were no established market makers doing anything with them. And then there were RIPs, and that was like a whole other subcategory. But you point out 20% of microcaps are actually profitable companies. Yeah. 35% have revenues over $10 million a year. Yep.

Are those the ones that you focus on specifically? Yeah, pretty much. I mean, so I'm primarily looking for the real companies that are in that sandbox. And my flavor of investing might be different than another microcap investor. I mean, you can find the same flavors of investing down here as you do in large-cap. You have deep value, value, growth, people focusing on life science, people focused on this or that. You have the same things. It's just these are smaller companies.

Do you buy small caps that micro-cap was forced upon them? Or are you buying companies that are on the way up and hopefully growing out and maturing out of that phase? So that's a good question. So I am more drawn to rising stars, what I call them, than a fallen angel, because I like to find new ideas, ideas that haven't disappointed anybody yet. Okay. Rather than, yeah, there's tons of SPACs that are down from a $2 billion market cap to $80 million, but they've already disappointed 90% of people.

They already still have four analysts covering them. They're just too known. I'd rather find something new that has yet to have that. They're messy. They're not like companies with promise. They're like companies with pissed off shareholder base. You mentioned that most of the greatest investors ever started in microcaps, and most of the best performing stocks ever started as microcaps, meaning they didn't go public with a huge valuation. So talk about that. Yeah. So I mean, Warren Buffett, Peter Lynch, Joel Greenblatt, you can go down the list. They all started their careers investing in microcaps for those same reasons.

Is that true? What was Warren Buffett's first stock purchase? It was a microcap, right? Berkshire Hathaway itself was a microcap and on an inflation-adjusted basis back when he took it over. It was a tiny company. It was a microcap. So all you have to do is find another couple of those. Yeah.

It's so easy, right? Okay. Yeah. But all those, I mean, it makes sense because this is where the structural advantage of the investor is that large institutional smarter money can't invest in these companies because the illiquidity profile. You know, it doesn't make sense for a billion dollar fund to worry about a sub hundred million dollar market cap, you know, company that they'd have to buy, you know, 20% of the business

to even have an allocation. Okay. 80% of the stocks that went up 10x or more between 2012 and 2022 originated out of the microcap ecosystem globally. What are a few of those? So I think it was Jenga Investment Partners out of London did a report globally on all companies between May of 2012 and May 2022. And one of the things, I think it was like 83% of the companies that made the biggest returns originated out of the microcap ecosystem. And that was, I mean, that was companies that trade on the Nordic exchanges from the NASDAQ, you know, globally. But, you know, it just shows that, you know, the big winners come out of these small companies. And it makes sense. I mean, these are-

What's the biggest one that you could think of other than the XM radio example? So on micro cap club, which is a website started in 2011, which basically I was a, my whole goal when I graduated college was to become a full-time private investor. And luckily I was able to reach that goal and the depths of the GFC. So in, it was like May of 2009, cut the cord with a couple of consulting gigs I was doing. And then kind of came up with the idea of I want to launch microcapclub.com, which was basically a private forum for experienced investors like me in this niche of investing. I wanted to see the idea flow globally. I want to get the best investors in this niche to talk about what they liked and why. And so since 2011, and again, I wasn't monetizing the site back then.

It cost me $30,000 a year just to have it and look professional, look better than what we were. I didn't monetize until like 2017. But today, it's a pretty cool brand. I think it's the best one in the world, quite honestly. And one of the things we do is we track the performance of every single company that was profiled by a member. So if you're a member, you might profile a small company.

It starts with a thesis. It starts with a discussion. What's a profile? Like seeking alpha style, just a write-up on a stock that people don't know about? Two to three page investment thesis, kind of on your favorite microcap. And so just to give you some stats, there's been 900 companies profiled on microcap clubs since the site was started. 164 of them have been acquired.

Oh, wow. And obviously there's some big winners in there. You mentioned winners. since the site was started. 164 of them have been acquired. Oh, wow. And obviously, there's some big winners in there. You mentioned winners. The biggest winner is a company called Expel, E-X-P-E-L. It's still a sub $2 billion market cap company today. But it was profiled by a member in 2014 at $0.36 per share. It hit $100 a share last year. It's still $87 a share. So that's a

200 bagger. Okay. And you didn't have my email or? Well, ironically enough, this is the sad. I remember traveling around to deal. So Expel, they make the paint protection film that's on the front of cars. So if you have a high end car or even a middle car, you probably have an option to put kind of this clear plastic film on the front of your car to protect it from rock chips. And we stumbled upon it in 2013. And it was, again, $0.36 stock, which that would have been a $8 million market cap. It's eight.

Not 80, not 800, eight. And now it's almost $2 billion, you said? Yeah, it's about $1.7, $1.8 billion. So what a smart strategy. I'm sure this has been attempted, so I'm like, I kind of know the answer, but intuitively wouldn't a really smart repeatable kind of

factory strategy be to buy microcaps right at the precipice of when they're crossing over into small cap? And like, of course, not all of them will keep going up. But of course, the one that's about to become a mid cap has to pass through small cap first. So maybe that's your filter, like that's your screener. Has that kind of thing been attempted in a quantitative way before that you're aware of?

I think it has. I know a lot of people try to game the Russell inclusion, which just happened last week. Yeah, yeah. You know, where they try to game that. Like a lot of these companies enter the iShares microcap index or whatever. Yeah, so the news comes out and people piled into stocks that were like right on the bubble. Yeah. And if you get one right, you get a 7% one-day pop.

Right, exactly. But I would take it a step – well, not a step further. I guess a step back. What I've – during the GFC, I was invested in three companies. Again, that's when I was making the transition to being a private full-time investor. Two of them went down 50%, which is on par with the market. I think the S&P was down 52%. 57%. 57%.

Close enough. It's close to that. Yeah. But the other one I owned was a small, profitable, growing 10 million market cap company. It was a company called Zagg, Z-A-G-G. They made that thin plastic film for phones for the iPhone. Oh, okay. So it turned out, I remember visiting the company in Utah in July of 2008, and they were on like a 10 million run rate, breaking even. And they just got, people just started buying it because the second generation iPhone was about to come out.

People needed to protect their screens and their iPhone with something. Their business went from $10 million a year to $20 million a year. It went from breaking even to earning 20 cents. That's how you get a 10-bagger, actually. Just something that can move the revenue line, $10 to $20 million, and put more earnings per share on the bottom line quickly. That happened during that GFC when the market was tanking. Because iPhones were brand new and growth was inevitable. And this company wasn't owned by institutions, so nobody could sell it, which was another thing I learned.

So what was interesting was that company went up 280% during that time period. And it was mainly because what I learned was institutional, which institutions did come in. Institutions are always attracted to growing businesses that can increase their earnings per share that they don't own. And what I found is actually the smaller area of microcap is where I want to be because they're also not included in the indices. They're not owned by institutions that are getting redemptions during downturns in the market. The smaller segment actually isn't. Like the quantum realm? Yeah. Watch Ant-Man. You downturns in the market. Like the smaller segment actually isn't. Like the quantum realm?

Yeah. Watch Ant-Man. You want to be in the quantum realm. So this area that you are involved with and that you're passionate about, it's a double-edged sword. On the one hand, this is like the dream of every investor, that they're going to buy something at 20 cents

that goes to $100. Like what investor, at least in the beginning, doesn't dream of that? And so that's the good part is that it has actually happened. It's not frequent, but it's possible. It is a thing that has happened. The other side of the coin though is because everybody is looking for that lottery-like return in stocks, Because everybody is looking for that lottery-like return in stocks, there are a lot of shady operators, and they just so happen to be able to utilize microcap stocks better than larger stocks. They can move them.

They can share news that doesn't exist because nobody's paying attention. have to compete with any actual, you know, like there are a lot of elements to micro caps that lend themselves to obviously people with bad intentions saying, let me get in here and manipulate something or whatever. So I know you're highly aware that there's a perception of that. You seem to be almost battling against that perception with like real professional investors on a platform talking about these companies. Do I have that story right? That that's kind of like the yin and the yang of this? Yeah, it is.

And I don't want to paint the picture this is easy. I mean, if it was easy, I wouldn't be here. I'd be on my own island somewhere. Right. You know, it's hard to do this. And it's not a game of batting average. It really is slugging percentage, kind of like venture capital or private equity. So you need the really big wins to outweigh the many, many, many things that go wrong. Yeah. But it's not zero or one. It's not like they're zeros. I mean, a loss can be like you

don't make as much money as you think. And a lot of the issues that investors face that are new to biker cap investing is they focus on the story stocks that don't have revenue, that don't have profits. What I tell people new to the space, focus on the real businesses, the 20% of microcaps that actually make money. You're not looking for a biotech microcap that is putting out press releases about curing cancer. Yeah. You're looking for businesses.

Yeah. Not ideas. Why are these companies even public? Like, why be publicly traded with a market cap of $25 million? Well, it used to be access to capital. And it's a great question because it's different from geography to geography. So here in the United States, there's fewer companies going public. But that is mainly the result.

This doesn't get talked about a lot, Josh, too. It all started back in 2010. There used to be 800 reverse mergers done a year in the US. 800. Specs. No. Shell companies. shell companies kind of shelves yeah where what's the difference so a non-public company could merge into a shell it didn't require there to be a public offering or a spac going public it was just a dead company that was like had a publicly traded symbol and not much else. If you were a private company that weren't big enough to go public via IPO, you could just reverse merge yourself into one of these shells,

and instantly you had a public security. And it didn't take – It's SPAC-like. It was SPAC-like, kind of eerily SPAC-like, because – yeah, it was basically a public shell with nothing in it with a trading symbol. You merge a private business into it. So back until 2010, there was 700 to 800 of these done a year where usually a company would raise $1 to $3 million, a small amount of capital. And they would just go public.

What happened was there were some Chinese frauds that came public that way in 2010. Many of them. And it kind of just put the clamp on that means of going public. Were these shell companies like people that squat on websites or was it companies that used to have a business that just didn't get delisted or whatever? The SEC would let them trade for a period of time, even if there was nothing in it. And so what happened, I think this is another one of those, another topic, but one of the reasons why we've seen such a decline though, in public equities here in the U S just the amount

of companies is because it went from 800 companies going public that way to 100 in about a year. And it's been about a hundred ever since then that's 700 less companies going public. We've spoken about this a million times, the decline of IPOs and there used to be such more activity, but a lot of the activity was microcaps. That's what I mean. It was the, it was this way of going public. And yes, 90% of them shouldn't have been public and probably, but you're still kind of large, law of large numbers, maybe 20 or 30 of them ended up up listing up to the NASDAQ. I have another, I have another story that plays into this, which is that I was there for the changeover from fractions to decimals. Decimalization absolutely killed the micro cap

and small cap market in terms of listings. Because back then, if you were a third tier brokerage firm, broker dealer, you would do 15, 20 IPOs a year. They were tiny companies. But the way you made your money was by taking a quarter. So you would make a market in the stock, totally legitimate. You'd make a market. When somebody, totally legitimate. You'd make a, when somebody says totally legitimate,

that's how you know it's not. No, this was acceptable. This was, all right, I'm the market maker in this stock. I'm a broker dealer. The stock is 10 by 10 and a quarter, right? Bid ask. I'm probably going to steal an eighth in the middle,

but it's not stealing. That's like my compensation for making a market in that stock. And because I'm doing that, I want there to be as much volume in the stock as possible. How do I get volume in the stock? I hire a research analyst. The research analyst is writing reports on the company and actually paying attention. Decimalization happened in, I think, 2000. Do I have that right? I think you're right. Okay. So decimalization happens and all of a, there's no eighth by a quarter or a quarter by three-eighths. That whole spread is gone. You have stocks basically trading a penny by two pennies. And with the lack

of that ability for market makers to make money, a couple of things happen. Number one, the New York Stock Exchange gets hollowed out. All those guys in jackets are gone. Number two, Sherwood, all of those market-making firms have to get acquired or fold. But then number three, you end up with thousands of companies where there's no more research written on them. Small-cap broker-dealers have no more incentive to hire analysts to cover them. So that's how you end up with a situation with all this detritus left over shells, like, you know, empty shells trading, just the ticker symbol. No smaller IPOs, existing companies with no analyst coverage. I feel like that probably led to a lot of opportunity for people that wanted to do the work. The firms got out of the business of doing the work.

Yeah. The system stopped being greased. You know, their ability to make money from these companies kind of went away. Yeah, I watched all that play out. And I was at a small brokerage firm. That was the bread and butter. Do small IPOs, support them with research, have the trading desk trade those stocks, and teach the brokers how to sell those stocks to the public. And it just just it vaporized

so and to answer your question about here in the us so a lot of times like the new ideas are just kind of like a new management team takes over an existing company provides a capital infusion they're kind of the new owners with a new strategy and it becomes something new you know so that's a lot of times what a new thing looks like here in the US. You still have real companies going public small in Canada and Australia. So you still have companies going public doing real businesses that are profitable, raising $10 million going public. And it's kind of embarrassing because these countries have $30 million compared to our $350 million, and they have a more fervent capital market structure for their small companies

than we do. And it's embarrassing. But that's just the truth. I mean, we see tons of companies that go public that are based here in the US, but they list in Australia, they list in Canada. It is ridiculous. You have a slide here that I think does a really good job of explaining the difference between, let's say, a typical stock and a microcap stock. So you're saying this is the difference between a microcap and a midcap, but you're showing us Target.

Not quite a mid-cap. I don't know. What's a mid-cap? I don't know anymore. I don't know. Is it $62 billion? No, it's large. $62 is large?

Is that worth it, though? It's not mega. It's large. Apple is $3 trillion. Is Target a large cap? It's a large cap, yeah. Fine. Let's call it a large cap.

Well, first of all, it's in the S&P 500. It's a large cap stock. Fair. Yeah. Fair enough. All right. Okay. So this was just a—

All right. So what else did you get wrong? No, I'm just kidding. Exactly. Everything here. Got it. Fair. Fair enough. Okay. So this was just a – All right. So what else did you get wrong? No, I'm just kidding. Exactly. Everything here. Walk us through this. Yeah. So this is just a good illustration.

So obviously you have Target on the left. You see the market cap. You see how much money is traded every day in it. You see the amount of analysts. You see how much of the float is owned by institutions. And then you see a micro cap, and this would be probably a nano cap. It's a dollar a share, 51 million micro cap. It trades $40,000 per day.

There's no analysts. There's probably not an institution. I just put one on there to be fair. So you're saying – so by comparison, Target has 1,900 institutions. They own 85 percent of it. Thirty-nine analysts follow it. Trading volumes, $500 million a day. Market cap, 62 billion. Right. So these don't look, these are like completely different species.

Well, and a lot of people would say, they would look on the right, and 98% of people would be horrified at what you're looking at. Right. And it's, but I actually reframe that or invert that and say, in the microcap space, what you find is at least the people that are successful, you have to do your own independent research. You have to form your own independent conviction. Because no one else is doing it. Because no one's doing the work.

And I think that actually reinforces the type of thing we need more of from stock picking. So it's not too far-fetched also that it just creates some great investors come out of the micro cap. But isn't that harder? Because you're not competing with price-insensitive buyers or people that don't know anything about the company. You're buying from people that are selling to you who happen to know at least as much as you, not in all cases, obviously, but these are informed buyers and sellers. Sometimes. Are they? I would say the opposite. Sometimes. I would say there's a lot of dumb money in 30 cent stocks. Is that crazy to think that? I think it really, it's situational. What I've found is there's very few people that really know what they own. You could probably say that about everything, but especially in microcap. Myself included, right? Yeah. Well,

you're saying people are more likely to be gamblers in microcaps? That's my guess. Yeah. That's predominantly what you have. You think people are more likely to be gamblers and microcaps? That's my guess. Yeah. That's predominantly what you have. You think it's more likely to be savvy investors in penny stocks? Yeah. If you're like – well, that's a fair point. If you're likely to speculate your ass off, I would just say you're just buying and selling Nvidia or something. Like why go all the way down market to this? Oh, do you hate that term penny stock?

Is it a pejorative? I wanted to ask you that. It sort of is. Yeah. It's fucked up, right? So penny stock is sub $5. It really has nothing to do, I guess, with micro or market cap, but it sounds pejorative. It's never used in a positive way. It isn't. Well, and that's the issue too. So you say micro cap very pointedly. You're not like I'm penny stocks.com. No, no, I don't blame you. I wouldn't either. If I would increase search results, I would say penny stocks,

but you know, hot penny stocks. Hot penny stocks. Yeah, exactly. The best. Are micro caps economically sensitive the way people think small caps are? Are they interest rate sensitive? And I ask that question because at the moment, there is a small cap rally underway on Wall Street. And a lot of people are framing it as like a catch-up trade. Small caps have been absolutely trounced by large caps for the last, I don't know,

15 years now. But every once in a while, they have a moment and it seems to coincide with like economic data getting better or something with interest rates. So whether you believe in it or not, there does seem to be some sort of corollary with the

economy and how small caps either perform or underperform. So I'm curious, do microcaps share that same sensitivity? Or is it like the quantum realm where they have their own laws of physics and it doesn't really behave that way? I think it depends on what type of company you're looking at. If it's a company that needs funded, it increases the cost of capital in this type of environment. Then that would be affected.

But you could also invert that and say some of these companies kind of dominate a niche area, geography, an area of the market where you can actually get away from a lot of the macro kind of worries because these companies are so small. It's kind of like the Zag example during the GFC. It's just like it didn't really matter. The thing was going to grow 100% a year because it was so small. All they needed was a few more customers to grow.

So what the data of the GFC, like the great financial crisis forces weren't at work on the company's fundamentals. Correct. And therefore didn't really disturb the stock. Correct. Okay. I mean, that makes intuitive sense to me that you could be so small

where economic forces are not relevant. And there was no large holders in that stock to sell it. That needed liquidity for redemption for people. Right, right, right. So you don't have mutual funds that are getting redeemed and then blowing out of the stock. Yeah, people like blowing out of the, you know, the Russells or whatever it is. How many of these stocks trade over the counter? Is it most all? I think there's 8,000 companies that trade on the OTC markets or thereabouts. Could you define that for our listeners? over-the-counter versus listed? What would be your definition on both sides?

So you have companies that trade on the NASDAQ, the New York Stock Exchange, that are sub-100 million market cap. But they're listed stocks. They're listed stocks. It's called listed. And then you have what's called the OTC markets, which used to be called the OTC BB, which used to be called the pink sheets. Yeah. And that kind of another negative term. Yeah. Nobody wants to hear pink sheets. Towards penny stocks. Yeah. In fact, Duncan, edit this whole subject, this whole topic up. All right, go ahead. I have a question about that. What is that referencing, pink sheet? Where does that come

from? It was literally printed on sheet. You want to tell them? Go ahead. You're already halfway there. I was about to make some shit up. No, I think it was because initially stocks were printed and you would get printouts and you knew the category based on what color it was printed on. And there was also – And I think blue chip comes from the same thing, right? I'll agree with that.

Okay. I'm not 100% sure. And then BB is bulletin board. So because these stocks were not on an exchange, they would literally have to put the prices on a bulletin board, like physically. So, okay. Keep going. Even up to like the 1970s, you had regional exchanges like in Spokane or these other areas around the country. Are you f-ing fact-checking me?

Look, can we get a camera? The history of the pink sheets. I was trying these other areas around the country. Are you f***ing fact-checking me? Can we get a camera? The history of the pink sheets. I was trying to provide context for the audience. No, okay. Go ahead. So you have a lot of companies that trade in the OTC markets, but you have a lot of big companies that trade in the OTC markets as well. Yeah, like Nestle.

Exactly. Okay, so right. You have this whole other category of ADRs, but are they even ADRs or are they just – I don't know what they're categorized as. Okay. But there's quite a few like really large companies that just – Foreign issuers of large – like large companies, but they don't want to adhere to all of the New York Stock Exchange's rules, right?

Yeah. So they're technically – I guess is pink sheets the the right word? Or they're just OTC? Well, in OTC markets, there's different tiers. And basically, the more transparent you are, you move up the tiers. OK. So the upper tier is almost the same as having New York Stock Exchange Company. They still file their reports at the SEC. They're still doing audited financials.

They do their 10Qs, 10Ks, 8Ks, everything. They just happen to just trade on the OTC markets because it's a cheaper place to trade. What are some of the actual differences if you're entering an order? If you're trying to buy something that trades $40,000 worth of shares a day, obviously you have to be careful not to move the stock price. I don't think there is much anymore. Like I used to – maybe 10 years ago I felt like it was just not as good, you know, but now I think it's – Thank you, Citadel. You don't – yeah, yeah. years ago, I felt like it was just not as good, you know, but now I think it's- Thank you, Citadel.

You don't, yeah, yeah. You don't have as many algos out there kind of working against you, you know, either on the OTC, what I've found. So I don't think it's that different anymore. Let's throw this chart up. iShares microcap ETF, which I didn't even know that existed, versus the larger market indices year to date. Microcap investors hate the index, right? We do. Yeah, so this is- But this doesn't make you look good. So for the listener,

we're showing year to date, the NASDAQ's up 30%, S&P up 14, Dow Jones, is that right? Dow Jones only up 2% this year? Ugh. And then microcap, the microcap ETF is flat,

but you don't think that that's representative of the asset class? No, not really. I mean, the Russell microcap is, I think it was 1,400 companies in there, 70% are unprofitable. I think the worst way to own microcap is to own all of them. Yeah, that makes sense to me too. That's why it's a stock picker's market. Yeah, why would you want to own them as an asset class?

That's not really the benefit. The benefit is to find the ones that are legitimate and not getting credit for it. Exactly. And that's why it's hard to get real exposure to microcaps is because mainly firms come out with a vehicle, but it's meant to scale. And honestly— Well, that's exactly right. You know why this is not real exposure? Because I'm holding up a chart of IWC and IWM, and they're almost the exact same thing.

What's IWC? Microcap. And there's no reason that they should be because small caps are big companies, right? Well, and I think even in the microcap index, there's maybe 20% of them have market caps over a billion. Right. So that's not more. That's a microcap. No.

So it's not really. Okay. So Ian's going to share with us the next three micro caps to blow up and we'll do that toward the end of the show. But I want to talk about some of your writing. You're a really good writer and you don't exclusively talk about micro caps at all.

You talk about investing because in the end, the same principles, there might be differences in the way that you apply this stuff, but the same principles are in play, whether you're investing in Apple or a $30 million market cap. There are some just key things about being an investor. I want to share something that you wrote in a piece called From Hustle to Scale. You're drawing the line between something that's a hustle versus something that can really

become a business. So you said what you consider scale is growing from 50 million to a 200 million dollar market cap. So that's a big distinction for you. That's a line in the sand. Okay. You said, a mentor once told me, me quote for a stock to double other investors need to think it can triple for a 50 million dollar market cap to go to 100 million most investors in the stock need to think it can go to 150 million the move from 50 to 150 or 200 takes serious fundamental drivers and deliberate execution. Fundamentally speaking, for a micro cap to go from $50 million to $200 million, you are looking for a management team and a business that can grow earnings from $1 to $3 million to $10 to $15 million.

This isn't easy. Few micro caps can cross this chasm. Can you say more about this concept? Yeah, I mean, in my earlier career, I made a lot of money on hustles, and I kind of got that hustle term. I mean, obviously, the word's been around forever, but Ben Bishore from Permanent,

he's the one that first kind of talked about that, and we're good friends now. And it's really these companies that only have two or three kind of key people there, and they never really expand the business past that and you can't build a 200 million dollar business with three key people you can get up to 10 or 20 million if they're in the right spot at the right time you're basically just reacting to everything and you know those three people are you know wearing all the hats from hr to

you know garbage man the dishwasher to the ceo sounds like us yeah exactly yeah um and so but you can make decent money you know in those stocks but just have to be aware that it's kind of like a reverse cigar butt where there's probably one or two more puffs of growth where you have to ask the real question is, is this management team one that can really scale? Right. So now with kind of how I invest today, I'm really trying to find those companies that can scale up and out of the microcap ecosystem. That's everyone's goal. And so trying to really analyze the management teams, the culture, the processes, to see if this is something that can really become a small company.

Management is really important in this size asset. So how do you analyze that? Yeah. Well, a lot of it's kind of commonsensical. You print up fake business cards. Yeah. Right? He told us that. Exactly, yeah.

You take a bus to New York. It's like looking common sense. You print up fake business cards. Yeah. Right? He told us that. Exactly, yeah. You take a bus to New York. It's like looking for repeat winners, people that have done it before. Yeah. And so I don't do a lot of screening, but I do do some screening on insider purchases that kind of alert me to a new management team putting skin in the game, taking over something, and having it turn into something else. That alerts me to something. So a lot of times it's diving in into those management teams and seeing if they've had

a history of success. So a lot of this kind of commonsensical, like to have these people built or founded, built, scaled other, other businesses into large ones and sold them. When you see, when you see fortune 500 executives in press releases announcing that they're taking jobs at a micro-cap company, that's got to get you excited. No. Because it doesn't get you excited? No.

Why? Well, it's, I mean, they're used to being the C-suite of Google. It doesn't really help a micro-cap company that's probably cash-strapped. Oh, I see. Okay. You know, it's like, that doesn't impress me. I want to see entrepreneurial experience, not someone that, you know. All right, not VP of marketing.

Correct. Have you ever hired a private investigator? I haven't, but I know plenty of other folks that have. That's where the alpha is. Well, it's not a bad idea. Most of the investors who hire private investigators, though, are probably on the short side, not the long side. Would you agree with that? They do, yeah.

Yeah, but I've seen both of them do it. In some cases, I think it's money well spent. There is I'm sure opportunity on the short side as there is with all areas of the market, but I would assume that there are a lot of micro caps

that turn into nano caps that go bankrupt. Are there a lot of short sellers in this space? There's less short sellers, there space? There's less short sellers. There's more activism. So 70% of all activism is in the microcap area. Interesting. Because it's easier to take over the board.

It's easier to get. It doesn't take as much money. So most activism actually occurs in the microcap level. There's a phenomenon where sometimes an entire sector becomes microcap all at once. And I remember seeing that with precious metal stocks in the early stage of my career. In the late 90s, all the steel mills went bankrupt. But before they died, they were microcaps. We're seeing that now with cannabis companies.

I looked at Canopy Growth the other day. Mike, what would you guess? Remember Canopy Growth was the hottest stock in the space? What would you guess its market cap is right now? $2 billion? Yeah, it's $258 million. Wow. So it's a micro cap.

And this was a – honestly, I'm not even making this up. People were like, oh, that's the blue chip cannabis company. I guess they had a big investment from another large company. But this was a $41 stock two years ago. It's 44 cents right now. So a company like that, I'm thinking of Bird Scooters, which had a $2 billion market cap.

It's now 27 million. Those are fallen angels. These don't interest you. No, not at all. Okay, that's what I was getting to. When you see a whole sector, all of the stocks become microcaps within the same year, that's got to be more like a red flag than like an opportunity. Some people are – I think it depends on how you invest.

Like I'm not attracted to that. Some people are if they like to look at dumpster fires and try to figure out the one that can – Yeah, I mean I guess – It all takes this bird to go up to $57 million microcap and it's a double from – Of all the ways to make money, that seems to me like the most desperate and like the least appealing. It's like I'm going to buy all these pieces of shit and like one of them won't be. Yeah. I don't know.

I couldn't get excited about that. All right. Is there anything else that we didn't do on microcap before we get into the wider world with you? I think we covered everything. All right. You want to throw us a few tips? No. No.

All right. Good. Smart. Smart. Not at all. I like that. This was an interesting week. We started getting a lot of data telling us that not only is there not going to be a recession in the second half of the year, but like actually things are getting better, oddly. And I don't

know how closely you follow this stuff, but I think it's important to get into some of the reports that we've seen. Mike, do you want to start with this Carl tweet? Sure. This is Carl Quintanilla quoting JP Morgan's Camporeali. I don't know what that person's role is. So let's say they're an economist, I'm guessing. Said they, he said, quote, this is what a soft landing feels like. They cut their recession odds from 40% last year to 25%. And the data just keeps coming in better than expected. There was, there's the city surprise, economic surprise index, like had an explosive week.

So there's a very good week for data. Durable goods, home starts. It's all trending in the right direction. Put up this home price chart. So this is the 20 city composite growth diffusion index. It's like the biggest metropolitan area. This area, this is Bank of America. First, it's a third month in a row

where we're just seeing positive month-over-month growth. So year-over-year, home prices are negative, but over the last three months, things are getting better. And B of A basically says, the existing home sales market

is still tight due to limited inventories, but strong demand for new homes have likely added strength to the pickup in April home prices. Overall, the recent data suggests the trough in the housing market has likely been reached and demand is helping the sector's recovery. Furthermore, the lock-in effect, homeowners unwilling to list their home due to locking in low mortgage rates has effectively placed a floor underneath prices. Right. So, I mean, this is something that everyone understands this concept. There's not enough houses. Put up the second charge on and people aren't willing to part with their 3% mortgage for a 7% mortgage. So, this is home prices rising for a third consecutive month,

but they're showing you year over year negative. So, but if that's as bad as it gets, again, combined with three and a half percent unemployment, it's really hard to forecast a recession with a straight face, unless you think like that's going to reverse itself overnight. I don't know. Thoughts? What are your small business owner clients saying? It's getting back to being a micro-cap investor. I'd rather talk to people than- None of them. I mean, I never hear stories about a wave of client negativity,

but we're skewed. We're dealing with rich people. Yeah. And they really didn't experience a recession, even in 2020, for the most part so they may have for like a month or two i don't think that our clients are a great canary in the coal mine for any kind of sea change in the economy um i just don't i don't think like if that were to become apparent now from a business owner standpoint that's a subset of our clients

i mean i think people hated the supply chain stuff more than they hate anything going on now. And that seems to have run its course. I talk to four people when I want to get sort of engaged in the economy. Buffett, Munger. Personal connections. Paul McCartney. Exactly. My mentors.

There's four people. One of them owns a fairly large residential construction company. So he's fine. Another one owns a fairly large fleet fueling. So he's delivering diesel, all that type of thing, B2B, even to air products, even large companies like that. I talked to – actually, my brother-in-law took over the family business that I was supposed to take over, but instead I got into microcaps. Actually, my brother-in-law took over the family business that I was supposed to take over, but instead I got into microcaps.

And they do basically advertising, like the McDonald's tractor trailer that looks like a Big Mac up there. Like they're the ones applying that on there. You know, and then I'm trying to think, who was the other one? Oh, another friend of mine is, he has 40 trucks that, you know, the big, huge trucks that carry heavy equipment that have oversized load in the back. Yeah, yeah. I talked to him. And so it's kind of interesting because you get a pretty good gauge by talking to those four individuals on what exactly is happening. And yes, it's somewhat insulated because it's in Lancaster, but they all kind of go up and down the East Coast. But they don't do AI. Right. Yeah, exactly. But each one of them, you know, so the residential

builder, you know, he said that people were still buying at 6.5. They don't like 7% interest rates. That's the ceiling. Yeah. He's like that's where you're starting to get really pushback and where he has to give deals. On the fleet fueling side, it was bad like back in March for something like the dry goods side. But he said now it's kind of coming around on kind of the heavy machinery moving stuff like that that was kind of that's kind of getting

washed out because there was too many trucks in the road it's hard to get anything no one's saying anything bad like my my brother-in-law's business that it's a sizable business like he's just wrapping new vehicles for businesses so he's a good he's a good person to talk to because his businesses people businesses buying new trucks yeah They need to buy new trucks. Yeah. And he's beyond busy. So I think there's a big difference between opinions and, and vibes as it were versus the hard data. And if you look at hard data now, stock prices are not hard data. Um, but they're not just opinions. It's the aggregate opinion. It's what the market is. You look at industrials breaking out,

materials breaking out. John, put up the home builder chart. Transports breaking out, home builders going vertical. S&P, home builders, ETF, XHB, up 32% year to date with what interest rates have done. So it's kind of incredible. Well, that's a special situation

because home builders are the only game in town, right? Existing home sales, there are none to speak of. So you've got that. Again, I hesitate to use hard data with stocks. But if you think about the difference between surveys and hard data, the chasm is pretty wide. So Bob Elliott tweeted, Today starts a series of highly focused on PMI surveys that offer no actual information value. S&P Global PMI and ISM surveys

have been unrelated to actual measured activity for years now in the US. It's a waste of time to focus on them. And so he threw up a bunch of charts, but people pay a lot of attention to this data of how purchasing managers feel about the economy. I love this take. But when you overlay it with actual data.

Nonsense. It doesn't matter how people feel. No, it doesn't matter because you can, you know, feelings can translate into, they can manifest themselves in the real economy. But everyone was waiting for the recession, right? The Fed was trying to manifest it with 10 consecutive interest rate hikes,

whatever it was. They froze at the housing market, tech declining, layoffs. And we just haven't seen it. Now, there is a case to be made that there's a lag, right? Like just because they hiked so aggressively, it doesn't mean that like instantly business is going to absorb it and react. But it's been like a while. It's been over a year.

It's not in the data. People aren't getting laid off. Inflation is cooling off. You had a higher GDP revision today. Employment is still super tight. Where's the recession? Here's the mother of all soft data. John, consumer confidence. This is from MarketWatch. This came out this week. Consumer confidence hit a 17-month high. A survey of consumer confidence jumped to a 17-month high of 109.7 in June, reflecting a slowdown in inflation, okay, and fewer worries

about a recession. The closely followed index increased 7.2 points from May. The May reading was the lowest in six months. So it's a big bounce off of a low reading. Notably, the future expectations index, which is a subsurvey within that, is still below the 80 mark, which often signals a recession ahead. The index has been below that level in every month except for one in the last 16 months. Americans think inflation will continue to slow.

They see prices rising 6% in the next year, the smallest reading since the end of 2020. Again, it's soft data. It's feelings. It's vibes, whatever. But still, it's from a lot of 2020. Again, it's soft data. It's feelings, it's vibes, whatever. But it's still, it's from a lot of people. So you kind of, you could say, all right, it's a survey. They'll feel better when things get better and then vice versa. It's kind of like concurrent. But so what? It's improving. People want a recession so bad, especially in finance. It's like, you know.

Yeah. What is that? I don't know what it is. What do you think that is? Are they bored? I think it's a few things. I think number one, people are underinvested, right? So I just think that's just, it's bitter, which I totally understand. If you feel like you were promised a recession, it didn't come. You thought that you were going to get bargains. It never came. I think it's the yield curve being inverted. Just basic, like that tells you something. It's got to tell you something. It has to mean something. Well, maybe, maybe not.

And I think you're taught that when the Fed hikes so aggressively, they're trying to cool the economy. They should be able to cool the economy, right? Like all that jives, it makes sense. And it just hasn't happened. The idea of a soft landing seems so minuscule, like the odds of it happening and to think that they might pull it off. Now, you know, they might not, but it's certainly trending in the right direction. Yeah, even I was looking at consumer debt delinquencies. It's still basically at lows.

Yeah, back to 19. There's no signal there. Back to 19 levels. Luke Cowan tweeted, recession is in a recession. As of June 23rd, weekly mentions of recession in news articles at its lowest level since April 2022,

roughly cut in half versus the start of the year. And I feel like this is, it's just the boy who cried wolf thing. You could only, how often can you talk about this peak, Mike? Uh, July, July, 2022. So that's when it was like obvious that we were going into a recession. Those are the most obvious. Um, wow. So, so those articles double-topped? Would you buy that formation? And then I think also people thought that the banks were going to be the canary in the coal mine. There's going to be a credit crunch.

Banks are going to stop lending. Housing was going to take the economy. Commercial real estate is going to take the economy. Well, guess what? If unemployment is below 4%, you're not going to have a recession. Jay Powell spoke in Portugal at a central banker event on Wednesday. And this is from the journal. Powell said because the Fed had lifted rates so quickly last year, there hasn't been enough time to see the effects of those moves in slowing economic activity and inflation.

Quote, policy hasn't been restrictive for very long, so we believe there's more restriction coming. Powell said he doesn't anticipate core inflation will return to the central bank's 2% target until 2025. If that article had come out in March, the Dow would be down 1,500 points. Am I exaggerating? No. We don't give a shit anymore about what this guy is saying. It's incredible. One of the things that was also underestimated in this cycle, rightfully so by everyone, myself included, is, and this is a BlackRock, not BlackRock, Bank of America take.

Like everyone underestimated the ability for gigantic corporations to protect their margins. And they got the memo and they got the memo fast. And they did what they had to do, focused on free cash flow and whatever else, and they cut fat, and they did it. And so analysts expected earnings to decline by six, and they didn't. Everyone got offsides, too bearish, and here we are. Now you have a new earnings season in two weeks,

so maybe we'll do it the reverse. Maybe. Maybe this time everyone's expecting it to be okay, and it's much worse. Maybe. I doubt it, but we'll say. Well, it is kind of that bullwhip effect, like you said. During COVID, everybody just kind of slashed because they were scared, and now they're kind of maybe over-earning a little bit.

But I don't know. It's just hard, like you said, to find any signal that there's a recession. Let's do this AI thing. I mean, this is a pretty wild chart. So this is from Sockchan. They said, quote, we estimate that AI-driven surprises led to a 3% to 4% increase in S&P 500 earnings per share this year.

That's not nothing. What does that mean? What's an AI-driven surprise? Well, NVIDIA, for example. Like, didn't they up their guidance from like $6 billion to like $11? Yeah, yeah, yeah. Something ludicrous in the next quarter. X NVIDIA, is there anything here or is it all that?

That's probably Microsoft too, I'm guessing. Yeah, okay. That makes sense. Do you know how many microcap companies have changed their names to put AI in it? Is that the wave right now? Were they all blockchain five years ago? Yes. Okay.

So now they're all AI? Yeah. There's one I followed that had like, it was a dog food company. There's a dog food AI. It's dogfood.ai. Is that their website now? No, I don't know. It should be.

So Ian, when you're investing, and I know you're not trading these companies, right? You're actually buying businesses. But nevertheless, you do have to be aware of the economic regime that you're in with some companies more than others. Do you think about that at all? Are you trying to buy companies that are more or less economically resilient that would be less susceptible to a downturn? How do you think about that? I think quality as an investment is defined by something that can grow that also can survive. And so I'm really looking for growth characteristics and survival characteristics.

And on the growth side, looking for something that can grow double digits organically for the next at least three years. And on the survival side, having a balance sheet that can endure a recession has a business that maybe can grow through a recession. And also you kind of have that intelligent, fanatic leadership, people that have skin in the game, that have financial resources. They can backstop the company if they have to. So it's a combination of really trying to find businesses that can grow

through a recession, which you put that screen across 10,000 microcaps. There's not that many that come down the bottom of that funnel. I would imagine you get only a few. Yeah. And so right now, I'm very healthcare focused just because it just happens to be a pretty good place to be if you think you're going to recession. A lot of these companies have moats because of some of the IP they have on medical technologies, things like that.

And there are also businesses that can grow 20%, 30% a year. So speaking of AI, why do rich people love venture capital but hate microcaps? Aren't they basically just buying non-public microcaps? Yeah, pretty much. I mean, it's really amazing when you think about it. So what is that? What is that dichotomy? Yeah, microcaps are a scam, but angel investing is exciting. Thank you.

Yes, exactly. Where almost nothing works, right? These are all small emerging companies, whether it's venture capital, small private equity, or microcap. Just microcap happens to be publicly traded. Why don't we just call them public venture? Yeah, it could be. Right? It should be.

Doesn't Toronto have an exchange, the Toronto Venture Exchange? Venture Exchange, yeah. Venture Exchange. That's where the microcaps trade. That's where all the microcaps trade. So the whole thing needs to rebrand. Not penny stocks, not microcaps. Public venture.

Well, and I'd be willing to bet there's probably less failure in public microcap than there is in venture capital. You should commission that study and wave it in everyone's face. That would be interesting if that's true. And I think rich people just hate microcaps too is because they can't actually invest in these stuff. Oh, so I think you're wrong. I think they hate it because it's not exclusive. Yes. If I get into a company that's being backed by Andreessen Horowitz, that has 800 million times the cachet as I bought this thing with five letters in the ticker symbol on the fucking Toronto exchange. No one's going to think that's cool. No, amen. I mean, that's the difference. That's the difference.

Venture capital. John's like, that's four F-bombs for you. That's it. Three? All right, I got one more. I'm going to use it when it counts. God. No, I was going to say, you're exactly right. It's just like, to invest in venture capital, you have to go to the right school, the right Ivy League school, know the right people, go to the right firm, have a certain socioeconomic class to be able to actually get those deals. And any idiot can buy a Michael Kapp stock. The whole ecosystem is open whether you have $50 million in your bank account or $5. Yeah, that's no good. You need velvet.

I agree. You need velvet robes. They like the accredited investor rule, right? Oh, they love that. Yeah, yeah. Oh, I'm accredited. Actually, I'm a qualified purchaser. You wrote this thing, Investing is Like Golf.

I love this piece. You wrote it in April, but I saw that you recently put it back out there. This has nothing to do with microcaps. You told a story about John Daly in particular that I thought was pretty cool. There's a story where Tiger is about to putt and I forget the circumstances, but it was pretty important. John Daly is playing like one hole over. He's not even in contention. He has as big a gallery watching him as Tiger does. Smoking cigarettes. So this is you. There's a lesson.

John Daly said, when people see tiger, they see perfection. When people see me, they see imperfection. I smoke, drink, eat too much, gamble too much,

failed marriages. They see it all, but they also see I'm not giving up. When people see me, they see themselves. When they see me win, they believe they can win too. God bless John Daly, right?

Yeah, I know. That's my favorite athlete, I would say. Yeah, he's pretty cool. I like when he pots with the butt hanging out of his mouth. But wait, so what does this have to do with investing? What are the parallels here? Why don't you tell Michael? Well, I think there was three stories in there.

That first one was mainly just talking about if you really want to form connection with people, you have to be vulnerable, show yourself, be authentic. Smoke cigarettes. Yeah, exactly. Smoke butts on the golf course. It's very rarely people that are perfect

that change the world. It's usually broken people that bounce back. Yeah. So you said, I always loved his response. You impress people with your successes, but you connect with people through sharing your struggles.

If you want to build real connection, it's more important to be honest, authentic rather than perfect. The other two lessons from your piece were you are nowhere near the best investor you can be. Inside every investor is a better investor. It's a little hokey, but it's also true. I keep telling myself that. That's what he says every time he hits enter. I think that story was Zach Johnson. So Zach Johnson was a professional golfer.

He won two majors, I think 16 times in the PGA Tour. And what made him unique was he wasn't the number one golfer on his high school team. He wasn't the number one golfer on his college team. He didn't even win a collegiate tournament. But he ended up winning two majors, winning 16 other times. And when they interviewed his friend that was the number one player on his high school and college team, they were just like, he just had this ability to get better every year. And in a sport where people peak early and plateau, he just kept getting better. Like John Daly.

Yeah, exactly. Yeah, exactly. And you said the third lesson you shared is golf is the sport that is most like investing and stock picking. Your opponent isn't the other players. The opponent is the golf course and yourself. That's good. Play your own game. Don't get distracted by what other investors are doing.

Okay, so at a professional level, you kind of are competing with other people, but most people playing golf are not. Okay. No, I mean, and I think there's a, actually, there's this book right here. Yeah. I think some of the best books. What is that book called? Tell everybody. Golf is Not a Game of Perfect.

Who wrote that? It's a golf classic. Okay. Dr. Bob Rotella. Okay. It's probably one of the most read books on golf. And what I found, whether it's this book or there's another one by Raymond Floyd,

some of the best books about investing were written about golf because it's all mental. You know, any individual sport, it's mainly 90% the mental game. So, but what do you say to the golf is like poker people or the golf is like baseball people right because everyone has their favorite go-to sports and now i like the golf one yeah i'm not really a golfer but that makes sense to me a lot of it's just like i think the biggest lessons are just bouncing back you know golfers have the ability to hit a bad shot and just and you have to keep going yeah you going to hit a lot of shots that day.

Yeah. Me especially. I'm going to hit the most shots. Exactly. Okay. Fair enough. Are you a golfer? You seem to be very fluent in professional golfing.

I do. I do like golf. I don't play as much now that I have a seven and five-year-old at home, but I do enjoy playing. Okay. We're going to do one more today. Everyone in Silicon Valley is on drugs is a Wall Street Journal story this week. I think it's a perfect explanation for 2021 when you,

you know, when you, in hindsight, of course, but the venture capital backed startup valuations, the crypto bubbles, the SPAC mania. If everyone, here's the Wall Street Journal. If everyone – here's the Wall Street Journal. Elon Musk takes ketamine. Sergey Brin sometimes enjoys magic mushrooms. Executives at VC firm Founders Fund, known for their investments in SpaceX and Facebook, have thrown parties that include psychedelics. Somebody said narc, sending a Wall Street Journal report. Routine drug use has moved from an after-hours activity squarely into corporate culture.

Psilocybin, blah, blah, blah. Oh, here's a great quote. There are millions of people microdosing psychedelics right now, said Carl Goldfield, a former sales and marketing consultant in San Francisco. Okay, not a doctor. He says it's the fastest path to opening your mind up and clearly seeing for yourself what's going on. This, to me, is the biggest difference between Wall Street and Silicon Valley. Let's, for argument's sake, say that there's as much drug use on Wall Street as there is in Silicon Valley. Probably different drugs.

Wall Street, people working in finance would never give interviews and say that they're doing anything. To me, that's a really big difference. People in Silicon Valley are like, yeah, I'm on mushrooms right now. I don't know if people are just bored or just don't have any fulfillment from their families or what it is. So what drugs are you on today?

Just water and Wilbur Buds. I don't know. What'd you think of this? I took a microcap before I started. You were on microcaps? Matt Levine had a great article and the headline was Silicon Valley is on drugs. Yeah, I think it explains a lot.

Not to be a dick, like. Come on. No, it doesn't. It explains what? How? It explains everything. Everyone's not on drugs in Silicon Valley. Come on.

No, I don't think so. But the fact that it's that in the open is interesting to me. I don't care. It doesn't matter to me. I'm not giving them money. I just think that's a really big difference. You could conceivably manage billions of dollars as a venture fund and have highly placed people working there openly taking psychedelics at a party. And nobody would think twice.

The ketamine thing is interesting. I don't think you could do that in Connecticut running a hedge fund. I just don't. Yeah, I don't think so either. I know there are people that will say that there are actual medicinal benefits to a little bit of mushrooms. I haven't heard that about ketamine. No, ketamine. So, all right.

So I know some shit about this. A friend of mine that I grew up with, he's in Florida. He's opened a chain of places, and it's like PTSD therapy. So it's not like they're not snorting lines of Special K like we did in the 90s. This is like supervised by nurses and doctors, but they are using ketamine for PTSD and it's a lot of soldiers.

I'm sure not everybody's showing up at these clinics, but it's legal. And Duncan, have you heard about this? I've heard about ketamine a bit, but it's mainly, it's an anesthesia drug, right? I think the original usage was to do surgery on pets. But they found like a psychedelic benefit to it. I've heard the same about magic mushrooms, psilocybin for vets with PTSD and stuff.

Yeah, they're using this as part of a bigger therapy. Although I have heard about people microdosing like in real life and being able to like function. Yeah. So you take like a tiny bit to one end,

I don't know, maybe it makes you relax. Where is the line? So you're an expert on this stuff. Where is the line between microdosing and just dosing? I have no idea.

Do you think Tesla drug tests employees? I think they do. You better be on drugs. Don't you come back here. You come back here negative one more time, you're fired. It was in the article, something about drugs. All right, listen, I don't really care.

It's none of my business. Let people do whatever they want. Okay, did you have fun on the show today, Ian? I did, it was great. All right, we're going to turn on the mics and do this for real. I just wanted you to get a little bit of a feel for what it's like. Let's keep going. Yeah?

All right, you want to hit record? We do favorites to close out the show, and I see you've brought props, which is great. So we're going to have you go first. Tell the audience about some of the stuff that you're reading. Well, we already hit on golf is not a game of perfect. I think we maybe hit on...

No, tell us about this. Alright, so speculation as a fine art and thoughts on life. This is... Looks like a 30-page book. It is, about this. All right. So Speculation as a Fine Art and Thoughts on Life. This is – Looks like a 30-page book. It is, about 35. This is Jesse Livermore's favorite book that a lot of people don't know about. It was written in 1880. Really the first six pages are all you need to read because that's the best part.

Oh, that's the best book I've ever heard of. Yeah, exactly. It's a short book. I wish I knew more of them. Why do you like it? Why did you bring that with you today? I don't know. It was just on my desk and I knew we wanted to talk about something. A lot of people don't

realize this was, everybody loves Jesse Livermore. They think they do until they actually learn something about him. Right, and then he killed himself. But this was his favorite book. Not a great guy. Yeah. Okay. And then this is the Oh, yeah, yeah, yeah. I don't know if you guys read that one yet. This is entertaining. So this is Ringmaster. Yeah. Is this new?

About Vince McMahon. I think it just came out a couple months ago. So I started reading this on the train ride. Who's the author? Who wrote it? Abraham Reisman. Did he get access? Like are people talking to him? It's mainly just talking to everybody but him, I think. Vince is not talking. Correct. Vince should have done his own book 10 years ago. It's crazy. Like the book starts off and it talks about like, why was it in April of 2020 when the whole world is shutting down? The only thing that's open is a hospital that there was a loophole put into the Florida legislature that allowed basically just him

to have sporting events through COVID. He was the only one. Pretty much the only. Pro-wrestling and nothing else? Yeah. Oh, I love this guy. Yeah, exactly.

And basically, it was into the politics of it, but it's a good lead into it. All right. So what is it called? It's called Ringmaster. When did this come out? I'm only 60 pages in, so I don't know See, this it's a good lead into it. All right. So what is it called? It's called Ringmaster. When did this come out? I'm only 60 pages in. See, this should be

a movie. I know it will be a movie. It's a crazy story. Yeah. It's only a matter of time. All right, Michael, what do you got for us? I saw a trailer that I cannot wait to see. Here's the tweet from Hollywood Reporter. Duncan, are you shaking your head? Liam Neeson can't

stop driving or his family will explode in the first trailer for Retribution. Didn't they make this movie Speed? So it's like Speed. However, so I was already all the way in for this trailer. And then I'm like, sign me up. Liam Neeson doing anything I'm in. But then you find out that he's being targeted because he was like a money manager that didn't do so well.

Oh. Not really. His performance wasn't good. Yes. I'm real then. Oh, Ian really. His performance wasn't good. Yes. I'm real, Dan. Oh, Ian, what's the Pando tree system? Tell us about this. How old is Dr. Nathan?

How old? Yeah. 73. Wow. What do you think? Still doing action flicks, huh? He's still a tough son of a bitch. What's the Pando tree system?

John, can we put this picture up on screen? Okay, tell us about this. This is really random. He's 71. Same thing. So this is the Pando tree system. It's a clonal tree system, which really random. He's 71. Same thing. So this is the Pando tree system. It's a clonal tree system, which basically means that it's 100 acres of trees.

Each one of these trees is genetically identical to the next one, and they all use the same root system. It's one giant. All of those are connected underground? 100 acres, yes. Where is this? This is in Utah. Okay. Is that the only place where this is? There's like two or three other places on Earth where they have these clonal tree systems.

This is one. It's been – it's supposedly like the second oldest organism on Earth and the largest – also the largest organism on Earth. But it's 100 acres and it just keeps expanding. How old do we think this is? 100,000 years, they say. This is 100,000 years old? That's what they're saying, yeah. And every season it comes back?

So the leaves turn yellow in the fall, and I guess they're really flat and really rigid, so just a little bit of breeze goes through them. It makes this rustling. It's called the trembling giant. I've never been there, but they say— And this is all one organism. It's one organism.

Hold on. Are you high right now? I was like, this is not good timing for me to explain this. If I cut one of these down, though, do the other ones feel it? I mean, I know they don't feel it, but is there an effect if you screw with one of these trees? I have no idea. I didn't dig into it that far.

But, you know, it was something that was new to me. And I often thought it would be surreal to, like, just go in the middle of this thing and just, like, look around and be like, this is one giant thing. It has been a while. Yeah, that's kind of cool. It must be one of the largest organisms on Earth also. It is. I think the largest is, like, some algae thing or something. Coral reef. Yeah, it could be. Okay. very cool my favorite very simply the best show of the summer

and if you're not watching i feel bad for you uh so i'm gonna i'm gonna put you onto this if you don't even know it's on hulu but it's an effect show called the bear and it's season two season one was amazing and this is even better than the first season. Is anyone in this room aware or watching the show? Aware. Oh my God. It's the show about the guy cooking.

Yeah. It's about so much more than that, Duncan. I didn't love the first season. It's about life. Everybody else did. You didn't love the first season? Did you half watch it with a phone? No, I watched it.

I don't know why. It just didn't click with me for some reason. Everyone loves it. Okay, well, it's exploding in popularity now and a lot of people that missed the first season or didn't appreciate it are going back. I'm going to try the second. It's very, very good. It's a very high-end chef who ends up back in his family business, which is like an old-school Chicago beef sandwich. The characters are written really well. The actors are all amazing in their role.

Is it the same cast? It's the same cast, but they've added people. And actually, we just learned that Jamie Lee Curtis joined the cast, and she's playing the mom of this family. Is Bernthal in it? No. He was in it last season, but he was in a flashback. You just ruined that for everyone.

No, I didn't. He was in it last season, but he was a flashback. You just ruined that for everyone. No, I didn't. Anyway, if you are interested at all in food or Chicago or Wilco, which is very heavily represented in the soundtrack, everything about the show is your vibe. So I highly recommend. Okay. We're going to wrap it up from here.

Ian, I want to tell people where they could follow you and where they could learn more about your style of investing and the Microcap Club. Where should they go? I'm on Twitter. My handle is my name, Ian Castle. Okay. Wait. That's C-A-S-S-E-L. Yes.

I-A-N-C-A-S-S-E-L. Okay. Perfect. And what about the site? And you can find me on microcapclub.com. Okay. And what do you do at Microcap Club? You write?

You have a blog? Yeah, we have a blog there. That's where we have probably 250 of the best microcap investors on the planet just talking about what they like and why. Look at that. Hey, you crushed it on the show today. We appreciate you coming all the way from Lancaster. Thank you. I'm just bugging you know. Yeah, we're going to get into the chocolates in a little while. Duncan,

any announcements? So I have one review to read. Let's do it. I know Jill listens to all of our shows. So this one's for her. Hi, Jill. Put Mom on the Phone wrote, Jill is the perfect addition, guys. Usually like your show.

Really love it when Jill S is on. We can't afford to hire Jill full time, but we'll definitely have her back. Thank you for that comment. We appreciate it, guys. All right, everyone. That's it from us. Thank you so much for listening.

Make sure to subscribe to the show. Like the show. Favorite the show. wherever you listen on your favorite podcast platform. Ratings and reviews go a long way. We will be back next week with all new shows. Stick around. We'll see you then. Thank you so much. All right, guys. Thank you. Dude, was that fun? That was awesome. Yeah? All right. Well done. Thank you.

Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah.

Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah.

Yeah. Yeah. Yeah.