The Derivative - Zigs, Zags, and Finding Micro Cap Winners with Ian Cassel

Episode Date: September 10, 2026

Ian Cassel, founder of MicroCapClub and author of Stock Picker, joins Jeff Malec to walk through the underfollowed world of micro cap stocks, tiny, illiquid public companies where most 10x winners are born. He shares his journey from blowing up a dot‑com era portfolio to rebuilding it with XM Satellite Radio, explains why structural inefficiencies and lack of institutional capital create opportunity, and breaks down how he evaluates management, survives volatility, and finds small, profitable businesses that can self-fund growth. Along the way, they compare micro caps to private equity and venture, discuss global markets from Canada to Australia, and explore why serious stock pickers and small business owners are increasingly drawn to this overlooked corner of public markets.  SEND IT!Chapters:00:00-01:06= Intro01:07-04:22= Hometown Roots and Micro Cap 10104:23-19:14= From Penny Stock Stigma to Informational Edge: Ian’s Micro Cap Origin Story19:15-38:15= Illiquidity Edge: Why Owning Every Micro Cap Fails (and Stock Picking Wins)38:16–50:49 = Betting on People: Management Upgrades, Tailwinds, and 10x Setups50:50–1:01:33 = Living Off Your Portfolio: The Psychology, Pain, and Payoff of Being a Stock Picker01:01:34-01:05:02 = Philly Sports, Risk, and Wrapping Up with ‘Stock Picker’From the Episode:Stock Picker (Book): Amazon | MicroCapClubRoadrunner Podcast episode Follow along with Ian and MicroCapClub ⁠on LinkedIn, and be sure to check out microcapclub.com to learn more about what they are up to.Don't forget to subscribe to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Derivative⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, follow us on Twitter at⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@rcmAlts⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠sign-up for our blog digest⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠www.rcmalternatives.com/disclaimer⁠⁠⁠⁠⁠

Welcome to the derivative by RCM Alternatives. Send it. Hello there. Welcome back. You're listening to The Derivative brought to you by RCM Alternatives, where most of us are Bears fans here in Chicago. Excited for the season to get started. We're also excited to be hosting some events in and around the President's Cup here in Chicago.

Head on over to RCMaltz.com slash golf. If you're in the Chicagoland area to sign up. On to this episode, where I have to admit, I didn't know a micro cap from a microbrewery, Even though we're a Microsoft shop and I sometimes look at my water in a microscope to see if there's any microplastics. So I got Ian Castle on a microphone who's made a career out of work in the pink sheets and the OTC markets to find needles in the haystack, diamonds in the rough, whatever you want to call them. So we get into all the micro details. Send it.

All right, everybody. We're here with Ian Castle. Ian, how are you? I'm doing great. Thanks for having me on. And it's Ian, not ion? That is correct. It's Ian. I can't remember if I said this.

We had Ian Weiner defense tech on the pod earlier this year, and I was telling the story, I think, of my wife had this girlfriend who had her boyfriend and every dinner party, he's like, no, it's I-N. I'm like, well, that's just too hard. I'm just going to call you Ian. I'm like, how do you spell it? He's like, I-I-N. Yeah.

So I'm glad it's just Ian. And where do you live? You're in East Coast? Yeah, I'm in Lancaster, Pennsylvania. It's about an hour, hour and a half drive west of Philadelphia, so call it, you know, South Eastern Pennsylvania. Are you a Phillies and Eagles fan and all that? I am.

Yeah, we're going to a Phillies game on Sunday when they play the Braves. So it's getting... All right. We might have to stop the pod because you've overtaken the Cubs now for the top wildcars spot. I was paying attention to the Cubs. Yeah, the Cubs and the Braves the last couple of weeks. Yep. And last, yes, last night, we banged up Miz Rowski and then still lost the game.

We got him pushed out and still lost. I'm like, come on, man. But that'll be fun. I was just listening to another sports podcast. If it's Phillies, if the Cubs can do one and the Phillies two, it's Bears, Eagles come and play the Bears on, I think, Monday night. And then that series would be Tuesday, Wednesday, Thursday. Oh, wow. So we'd be overrun with Philly people in Chicago.

go for four days, which isn't the end of the world. So what happens in Lancaster? How did you end up there? Born and raised in this area, I mean, Lancaster, we're kind of known for the, we have the largest Amish community in the United States, maybe the world right here in Lancaster. So that's kind of what we're known for is Amish. In fact, I think it's like number two in industry here. So it's a, Lancaster is a very, as you could imagine, rural, agrarian, conservative

Bible Belt type of county. Yeah. And it's kind of pinched between like Baltimore's an hour south. Philadelphia is an hour east and then Harrisburg at the capital of Pennsylvania is like 30 minutes north. So we're kind of like pinched in between there. So and we still have a train that can take us to Philadelphia, a train that can take us to Manhattan. So I've always kind of liked it here. I hated it while I was growing up when I was a teenager because it's boring. But yeah, it's kind of like once you move away and you're boring's good now. Yes, exactly. Everything flips. Amazing.

like so. I've always been amazed in the Northeast. Like you get a little bit outside of New York, Philly, and you're in the country, super fast. I'm like, right, except for New Jersey, which paved over everything for 100 miles. Not really if you go to Princeton and whatnot. But right, like, how did the Northeast figure that out?

We're all these, right, if you go to Denver, you go to all these new cities that just keep building, expanding outwards. Who knows? That's for a different podcast. But it always amazes me of like someone had good foresight to say, no, we're going to keep this. somewhat rural and not just pave it all over.

So microcaps, you might as well have it tattooed on your head. That's your world. That is my world. That's all I do. I know nothing of microcaps. So we're going to have a little education session here. I'll start with, I'm assuming, they're smaller than small caps because they're micro. So I'll let you take from there.

Give me the what they are first. Then we'll dig in. Sure. Yeah. And so microcaps, you know, if you looked at the universe of stocks globally, you know, 60,000 public stocks globally across all markets, about half, 30,000 would be considered microcaps. So microcaps are in every market on earth that there is a market. And it's simply, quite honestly, it's just a small business with a ticker symbol attached to it.

It's usually what they are. But the definition here in the U.S. would be market caps, sub 500 million market cap. you know, and that can obviously go down to 10 million market cap and 50, but everybody kind of defines it as 500 million or less. And so it's a big bunch of, it's a lot of companies, especially here in North America, you know, kind of the U.S. and Canada, it's about 10,000 microcaps that trade in the U.S. and on Canada. It's probably about 60% of all, you know, public stocks. And, you know, really the opportunity set here is, and the structural advantage in microcap investing is that these are small companies. They have. illiquid currency which is their stock which keeps institutional investors away and that structural advantage has been in place for a hundred years you know and all the most of all the greatest stock pickers from Buffett to Lynch to Greenblatt all started a microcap and they started here because this is where the inefficiency of this landscape is and it's kind of a it's kind of a gated city where all the

institutions are kept on the outside they can only buy these stocks once they perform go up become more liquid and allows kind of greater pools of capital to participate, you know, once they become small caps. And so that's kind of the advantage of a, of kind of the small astute, even private investor, is this is a world where you can gain an advantage because the institutions are kept on the outside,

even in today's market with ETFs. I mean, you're still talking about companies that trade $10,000 USD a day, you know, and so it's just too hard for anybody managing north of $100 million to care about this ecosystem. But most of the best performing stocks originate out of microcap, you know, so that's the other thing. Are we talking like pink sheet stuff? Yeah, I mean, the figures I gave you... Does they're too small that be NYSC listed on it?

Yeah, I mean, the figures I gave you include the OTC on that. But the top two tiers of the OTC, which is a majority of them, I mean, they still have the same regulatory constraints as the NYSC or NASDAQ. They still have to file quarterly filings. They're 10 Qs, 10Ks, all day. those things. They're just an OTC listed company. So the OTC is definitely a big chunk of the U.S. percentage of microcaps trade there. And what is that? If I'm on Robin Hood, can I pull up some OTC symbol and trade it? I don't know if you can on, like, I don't have a Robin Hood account,

so I'm not sure if you can on the OTC. I'm not sure. There's, because of FINRA, it's gotten really hard here in the U.S. to be a microcap investor and for the microcounter. companies that are U.S. focus because FINRA has kind of come down with a hammer and they've kind of labeled everything sub five dollars, whether you're on the NASDAQ or OTC as penny stock. And a lot of those, a lot of the firms and the clearing houses just don't want anything to do with small microcap, specifically U.S. listed microcap securities. We don't have that same type of headwind in other markets like Canada. It's a pretty fervent market.

Australia, things of that nature. You know, kind of gets us to another conversation. of like, do companies still go public small? Yeah. And, yeah, the answer is they do. Yeah, or like, they do still. Yeah, stick a pin in that one for a second. Are the, like, my brain was going to, is this the new private equity?

Or is it the old private equity or something, right? Of like, private equity's gotten so big and they're buying these things before they maybe in the old days would have gone public. Like, what's your compare and contrast with private equity, which is sort of doing the same thing, right? Small sub-500 million-dollar companies. It is. I mean, I kind of divide up the small business investing universe is kind of venture capital, private equity, and then microcap. And the irony there is those first two silos are glorified by the financial media. You know, all you hear about is how great they are. The last one, which is ours,

we're the ugly stepchild of the bunch that nobody wants to talk about. We're just kind of perceived as penny stocks and the slimy, sleazy wasteland of uninvestment. securities. And yet, we all are just small businesses that, and quite honestly, ours are at least audited and you can see the financials unlike the other two. So it's a, it's just as interesting. What does that look like in terms of funding into, like that pie chart? Is it, I'm sure it's like 80% private equity, maybe 15% venture, 5% microcamp?

Yeah, I mean, to give you, to give you an idea of just how big and small the U.S. public microcap ecosystem is, if you were to take all of the microcap companies in the U.S. and kind of roll them up into a ball, the total market capitalization would be probably around 600 billion. Which is like what Nvidia makes in an afternoon. Yeah, or it's stock moves. There's like 20, yeah, probably 20 companies now that have individual market caps more than 600 billion that trade.

So, you know, so that just goes kind of how small it is. And also probably a big reason why there isn't much attention brought to. the space because institutional capital, there was no reason to arm wave it, you know, on anywhere, you know, but the same structural inefficiencies, you know, that were around 50 years ago when Buffett was slinging cigar butts is still here, you know, today. What's that mean? Slinging cigar butts? Well, like, he was a, yeah, yeah, exactly. Everyone's still on the golf course, but. Yeah. Yeah, but it's a, it's an area that I got, I got into when I was like 20.

I guess I would say 2021, and it's all I've ever done. And, yeah, I just think it's an awesome place to invest in. It obviously has risks associated with it. And you kind of learn by losing money. Like all good things in life. Yep. So what did that path look like? You were right out of college and said, I want to be a microcap investor?

Well, it's odd path. There was no guidance counselor that pulled you back. Please, what's wrong with you? Said no, go private equity. You need to be on medicine. What's wrong with them? Yeah. I mean, it kind of, it started, maybe a story worth telling.

It all started when my parents, when I was a sophomore in high school, so this would have been 96. So kind of been the start of the dot-com bubble, technology bubble, they kind of sat me down and said, we saved for you $20,000, you know, and this is all you're getting. You know, we just want you to know that now so you can make the adequate decision you want to make. And quite honestly, they didn't, they didn't care if I went to college or not. They probably preferred I didn't because I came from a family business. They would have wished I would have just worked for the family business. that I'm going to college.

But I decided they gave me control over that amount of money, and I could easily incinerated that on a brand-new Eagle talent or something like that, back then. I had the Mitsubishi Eclipse eclipse, which was, I think, the same car, right? I remember thinking about it. I remember thinking about it. But they allowed, they opened up a brokerage account with their financial advisor and put the money in there and put it in my name.

And it wasn't long until I was starting to get it snail mail from it. And they were talking about technology stocks. And, you know, a month later, I'm like, oh, I'll buy $5,000 of that one. And, of course, it doubled in like two months. And, you know, you think it was. Yeah. This is just easy. Like, why isn't everybody doing this?

And then bought another one and another one, another one. And so that was like when I was a sophomore. And by the time I was a junior or senior, it was probably 70,000. And, you know, I'd gotten bit by the greed bug. And I'm like, staring at this money. I'm like, I could spend all this going to a private college at F&M here locally. where I could go to the community college and commute for my parents' place

and get a part-time job and not spend any of it and just continue to invest because making money is easy, right? So that's what I ended up doing. I ended up going to a local university working for as a branch office administrator for an Edward Jones office in town.

So it kept me attuned to the markets. It was basically a receptionist there. And then I went to school full time. And then the dot-com bubble peaked out 2001. Yeah, I was about to do a narrator voice Little did he know. The dot-com bubble was around the corner. And it was.

The portfolio had a peak of $120,000, and then it went down. And when it hit a low of eight. Eight. So, yeah, went down to $1.20 to $8. $120 to $8. And obviously learned lessons during that as well. But one of the other lessons I learned, you know, before that, I thought my next, what I was going to do was going to be, become a financial advisor.

and then just dealing with the emotions of clients down the dot-com bubble down draft and having to answer the phone and stuff like that I was like, I don't want to deal with clients or customers. Like it's hard enough dealing with my own emotions with investing, let alone other people. I don't want to do that anymore. And so basically all those small cap tech names

became microcaps. They got baptized into the underworld of microcaps and that's where I got introduced to it. And I was probably 20, I would have been 21, you know, right around that time. And they're like, what part of you is like, I'm going to go be a dentist or something, right? Like, was there a part of you of like, this is stupid? Like, I got wiped out.

It's weird. Like, I've been reflecting on that. And, you know, a lot of people say, like, the biggest educator looking back on their careers or whatever is the losses. I would still point to that first win, even though it was 110% luck, was probably the biggest, biggest difference maker in my career, even looking back today. because it just proved that I could make money. Whether I did it with luck or skill was one thing. But I already proved myself I'd made money before. And I had enough misplaced self-confidence,

even after losing 90% of my money, that I believed that I could make it back again because I already made money before. What was the name of that first stock? Do you remember? The first stock that I looked at in earnest was XM-Salite Radio, which would later merge with Sirius, and now it's in every car.

But back in 2001, it was a... story stock which just means it had no fundamentals you know they just launched a couple billion of satellites into space and it was actually a stock that was 42% covered by shorts so it was like a huge short position in it people were betting it going to zero and it was a 180 million dollar microcap it was a story stock but obviously I didn't care about fundamentals because I was looking at this thing but I saw that the CEO is going to be presenting in Manhattan at a small cap event. And I was a, again, a sophomore in college. And I called the conference organizer.

And they said, small camp, not micro camp, small cap event. They was a small cap event, probably because it already XM dipped too low by the time they got invited. But yeah, yeah, so I ended up convincing them to let me come to their event. And I ended up taking a bus from Lancaster, Pennsylvania to New York City. And I couldn't get a one-on-one meeting with Hugh Panera, the CEO, but I was able to listen to his presentation and I followed him out the back of the room and into one his one-on-one institutional meeting area and had a 10-minute conversation with the CEO. And I don't remember what I said. I was just like, my eyes were as big as saucer. I was talking to a public CEO here, you know. Anyway, I ended up taking that $8,000,

buying XM at $1.78 per share. And sure enough, luck, you know, hit twice. They signed, they refinanced their debt the next week. They signed another OE. agreement the next week huge short covering rally went from a dollar 78 to 34 and 14 months ended up making all the money back from the dot-com bubble crash and that's kind of what started my love affair with microcap investing you know from that point forward was and yeah it was the fact that i made money then again but it was more so that an idiot like me could sit across the table from a CEO and feel like i could gain an informational edge you know and that's suck to me. And that's even that at first experience. It's why I'd probably put as much emphasis as I do

on management teams and quality of leadership and meeting management, talking to management, visiting them as much as I do today with my investment process. And then something you mentioned on the way, like things becoming microcaps, does that, that scares me right of like, oh, I'm catching the falling knife on the way down, right? Is it like the microcap is a necessary step before they go bankrupt? What does that look like of like the odds that any of these are kind of a go-to-zero play also? I mean, I would say a decent, I don't know what the percentages would be that ultimately go bankrupt, but, you know, the odds aren't in your favor of catching a falling knife in microcap,

especially if it's a money-burning business. You're not in your favor. Yeah. Correct. Yeah. It's not in your favor. So, and all of that would. And it's kind of weird because I got, I kind of got started and investing similar to XM where the next five years, I would kind of concentrate all in story stocks.

Again, no fundamentals, you know, and that's what I would hitch my sidecar to. And it's like trying to find the next story, the next thing I thought was going to take off because of the story, less about fundamentals. And I would really only start caring about fundamentals, you know, seven, eight years later. And in those early years, met a couple mentors. Back then, all the activity on these small microcap companies, because no analyst covers them, no institution owns them, was on public stock message boards. So at Yahoo Finance and Raging Bull, Investors Hub, Silicon Investor.

That's where retail investors congregated to talk about that. They were the discords of 25 years ago. And so that's where I ultimately went and met a few people that would become mentors to me and showed me some things about investing and things like that. And so is there an index, a microcap index? There is. It's not a very good one. So Ishares has the IWC is the symbol.

It's the Ishare's microcap ETF. And it's just not like a lot of things. The title of it isn't exactly what it is. You know, there's several. I mean, there's, I think it's, I don't know, 1,400 stocks in the ETF and maybe half of them are over a billion market cap. There's some that are 10 billion. You know, it's not really the correct representation. But it sounds to me like you're saying you wouldn't, even if you could, you wouldn't want to own all the microcats.

No, I think the worst way to get exposure is to own all of them. For the reasons for time, but a lot of them don't have a real business or they're on their way down. Yeah, like even if you looked at the historical, like since inception of IWC, the I shares, which I think it was back 15, 18 years. You know, it underperforms, you know, by a lot. And I mean, it's 78% unprofitable companies, which in today's market works, but not in every market. And so it's just a, it's kind of a cesspool of mainly unprofitable companies, you know. So the key to microcap investing successfully is trying to find actually these small businesses that are real that are growing revenue profits. They don't need to raise any money.

You know, that's something I would learn later on. And what is that? Right, it almost disqualifies them from being a microcap because all of a sudden they'll raise money or do a deal and get launch and have more revenue and quickly move out of that space. That's the goal. It's hard to get the escape velocity. Microwcap keeps trying to pull you down, you know, it seems. But the key really is finding those situations that have good businesses. You know, they're not just a good story. You know, finding a good story with a good. business that can actually earn money that can self-fund their growth. Ironically, ironically, it's the companies that don't need to access the markets. They don't need a bank to raise them money. They just, they just churn higher.

I mean, in my world, especially these small microcaps, you know, just a company and it sounds so small, but just a microcap that can grow revenues from $20 million, which is small, obviously for a public company, $20 million and earn half a million to $60 million in revenue earning five. Like that's a 10 bagger in my world. It doesn't sound grandiose, but that's the beauty of microcate. Like, you don't need to find the next Google. You just need to find the next small business that can grow revenues and earnings without diluting you.

And what, give us some examples of some of the stuff some of these companies are doing? Like, is it boring, like manufacturing type stuff? Yeah, I mean, pretty much all the industry types that you find in, you know, small, mid, large, you know, you find down here. I mean, yeah, you're not going to find as many utilities as a microcab. But pretty much everything else or airlines too, probably. But everything else, you'll see all of those different areas from industrial airspace defense. You know, all those areas are represented down here in the microcap realm. Obviously, a lot of med tech health care resources, some of the areas that are more prone

because they need to raise money might have a higher percentage waiting than what you would find in, you know, a mid-cap ETF. But for by and far, you're getting a pretty good mix across the board of different things. And so honestly, some of the best microcap investors I know are just quite honestly small business owners, you know, and they have an area of expertise in a niche of an industry and they can dive into, you know, the five or six in microcap and gain an edge there because they have an understanding of what it is because of their own business or one they used to own or a business they sold. And so, which sounds a lot like private equity, right? Yeah, exactly.

It is. Yeah. And then how, why do they go public? Right? If they're just cruising along, they're not very big, they don't need the banking. They don't need the influx of capital. Like, why did they go public? Well, they probably went public originally because they did need to raise capital. Okay. You know, and that might have been five years ago or 25 years ago. So the original intention usually was to raise some amount of capital. I think the reason to remain public, and I spoke at a small business event, and like nobody ever thinks about going public. a small business anymore. But, you know, the reason to think about it, which none of them think about, and this is what I was presenting on, was that example I gave you. Like, I could, I gave, I can give you like 10 examples of just these small, boring companies.

Like, you could, you could make toothpicks. And if you can grow revenues 20% in the bottom line 40 or whatever, and just not dilute, you know, you're going to trade at a 15 to 20 multiple. You don't have to sell to private equity for four times. And so, like, if you believe in yourself and you believe in your small, business that you can grow it sustainably. I mean, microcap investors, which, you know, are, the good ones are very smart. Like, they're craving for actually real businesses. Right. So it's not just like these things out in the vacuum. There's investors, real investors,

real money looking constantly and trying to find out. Especially in today's day and age where, as you know, like the world's opened up. So like a lot of European investors now looking to invest in U.S. microcaps. And we have, I started a community called microcap club.com back in, 2011 when I was a full-time private investor. And, you know, today it's, you know, there's like probably 24% of the communities from Europe, 10% from Australia. And everyone's investing in each other's geography now, you know, because the world's opened up. You can trade in any market now.

And so how many users are, what's that look like? Has that been a fun project? Yeah, I mean, it was. So I became a full-time private investor, just kind of living off my portfolio right off of the GFC in 2009. And again, I had an affinity towards public stock message boards because that's kind of how I cut my teeth in the space, kind of building a reputation there for the previous 10 years. I should build my own.

Yeah, but it became like a cesspool over time. And you just kind of get sick of dealing with idiots. So I was just like, well, why don't we just create a private forum where those of us that know what we're doing can have a private forum, we can just talk about the ideas we like and why. And so that's how it can moderate. who's who and make sure they're legit. Yeah, you don't have to worry about, especially back

then it was even more strict and I have to worry about you know, grandma seeing what I posted and buying 100 shares losing money and then FINRA was shutting down my account because they think I made, you know, was giving her financial advice on a public stock message board or something. You know, I just wanted everything closed off and

and so we started in 2011 and you know, now it's 15 years later I think we probably have the best brand in this niche of investment class, you know, microcap club. And we also have two in-person events every year in Vegas and in Toronto. And so kind of one of my long-term missions is to bring quality investors, quality companies back into this space, you know, keep it, keep the light lit, so to speak. Where was Finra when they were sending you pitching a tech

company when you were 15? Yeah, right? Yeah. Like, you should have listened to this. They pick and choose. Yeah. And circling back with, like, do you end up with a lot of biotech? It seems like those are like, don't have revenue yet, pre-revenue. And then like if they find it, if they get this new drug, that's like a 10, 20, 30 bagger. I think that's connected to the other question too. It's like that's here in the U.S., I would say that there's still small companies going public, but they're lesser quality than before.

You know, there's very few Walmarts going public as a microcap in 1971 or 1970. You know, you just don't see that quality level of a real business going public small. That was real? Walmart was it? Yeah, and a bunch of them did when there were microcaps back then, you know. And so you just don't see that. And what you do see is what you described. Like, you still have the company trying to raise $15 million as a go public for a phase one trial, you know, or whatever.

And so you still have those kind of more story stock. industries that tend to go public. But, you know, we need more of those higher quality ones. And it's, it's a shame because there's other markets that it's easier for companies to go public small and raise money like Canada. It's a better market. Australia, you still see actual real companies that are small that are profitable going public. And again, it just makes it more important today than yesterday that a microcap investor, you know, is looking at other markets, not just here in the U.S. I still see plenty of ideas here in the U.S.

just because there's so many of them that exist on our markets, whether that's the OTC and NASDAQ and YSC. You know, there's still, when there's 10, I mean, there's more microcaps than that trade on the NYC and NASDAQ combined, you know. So there's plenty of things to sift through and I don't need to own all of them.

I just need to own 15 that I like, you know, so. What's your, for stock figures? What's your macro view on why the, why groups are not going public sooner, right? Whether it's as a micrograb or even as a, like, you'll see SpaceX, all this. I'm waiting until a trillion dollar valuation to go public. Yeah, I mean, because they can, you know, it's like before you couldn't raise money privately or wait that long, you know, now those private markets are opened up because, you know,

everybody is invested in private equity. Every endowment is. Everybody, you know, wants to, you know, mark their marked or whatever they're marked at, You know, and they like that continuous 20% up into the right that they feel like they're going to get, you know, being in private equity. So we just can't. Yeah, you're doing it wrong. You're doing private equity with with daily marks. Well, and that's what scares everybody away, you know, when it comes to institutional too. It's like, you know, institutions, like they don't like it. owning some companies where somebody buys $100 worth and that position's marked down 10%. And it ruins their bonus or their performance fee at year end. You know, and there's more. There's more. risk to there's more risk to illiquidity than no liquidity that makes any sense I think yeah in their eyes so in their eyes but is it yeah so that the whole growth of private equity and venture has led to more access to capital which is led to less companies needing to get capital from the public markets yeah right what does that continue you think like that's here

to stay um I think it will I think there I think there's going to be some point in the future, maybe you feel this way too. And maybe this is 20 years away. But I feel like at some point, like everything just merges, like the difference between a private and a public just because all these private companies are still trading on these private exchange, you know, where they can, you can sell what you want, buy what you want. Yeah, secondary. And all this stuff. Yeah, when does everything just merge and everything's just traded, you know, public or private? Which would be the crypto people, right? Like everything's tokenized. Okay, this token is here and there and I can see a price. but and that really like did that take some wind out of microcap sales for a little while there

of like companies were creating tokens to raise money instead of going public as well I think so um but even so it's just like the again it just makes you I still find plenty of stuff in the U.S. to buy that I think are really good even in the face of that even like the data you know there was a there's a paper put out by Jenga partners they looked at every stock globally that one yeah at Jenga partners out of the UK. They did a white paper on, they analyzed every... Pull out the wrong piece. Yes, exactly.

Is that their slogan? Yeah. Yeah. They did this research paper where they studied every, they looked at every stock in the global markets. They looked at only the companies that went up 10x or more over the last 10 years. So I think it was 2012 to 22. And there were several hundred companies that 10x or more across global markets.

87% originated out of the microcap ecosystem. And then, but the other interesting thing was, 91% of those were profitable. You know, they weren't some story stock or, yeah. So, you know, and then you can pull up the CRSB data, and it shows like the bottom decile, which is the smallest decile in market cap, has outperformed for the last 110 years by 300 basis points.

You know, and then you have Roger Ebbotson. he looked at illiquidity as a factor in outperformance. And he studied all stocks from 1970 to the present. And he showed there that like actually ill-liquid microcaps are the best performing by like 200 basis points from the next area in the matrix of like large, large but liquid, large but ill-liquid, that type of thing. So you kind of like even put the empirical data together and you want to be in smaller the better, the more liquid the better. you know, and the left, institutionalized the better, you know, as a starting, and profitable. So didn't Ibitton's, uh, didn't that data get flipped on its head like two, three years ago? Like the, right, you could argue private equity had an edge because the illiquidity, there was a discount because you weren't liquid.

And then that got so much money that it actually traded at a premium, which is to what you're saying. Like those people who don't want to get fired and want to get their quarterly, they're like, hey, I'll pay up for this because it's on. unmarked. And so that is curious if you run the data over the next 20 years with the premium. It would be interesting. Like it, I thought, I thought the other, the other interesting thing there was actually the other side of it was, like, what the worst performing one was. And so the worst, the best performing was illiquid microcap. The worst performing was liquid microcap. Hmm. And I have a theory on why that's the case, you know, and I had some experience. I had some experience with this in...

Let me interrupt you. What's the difference there between illiquid microcap and liquid microcapt? Aren't they all trading? They're all trading, but I think it's, I think I'd have to look at his waypeer how he defines liquidity. It's like you said, if only $10,000 trades a day or something that's illiquid. I think it was like what percentage of the float trades per day or something like that was the was one of the, I think was the metric. So not if you can trade it of... or not that it's tradable on an OPC.

Yeah, they all trade. They all trade it. Can you technically trade it? Yeah. They all trade, but if you're comparing a, you know, a 200 million maro cap to another 200 million maro cap

and one trades a million shares, you know, at 10, and the other one trades 10,000 shares at 10, you know, it's probably how, so I think it's like, I think he was using a percentage

of the float that traded daily. But it showed like the liquid theory, yeah, the liquid segment performed the worst. And during 2008, during that crisis period, I was invested in three companies because I was super concentrated. And one of the companies I invested in was a company called Zag. And a year prior, the new iPhone came out that Steve Jobs had.

And then after people had an iPhone for the first time, they realized they needed to protect the screens on this iPhone. So when the second generation iPhone came out in June of 2008, you know, people were like, oh, crap. Well, this Zag company made screen protectors for basically cell phones. And I went and visited them in Salt Lake City and the founder and the CEO in August of 2008. This was a 65 cent stock, about a 15 million marocap, and they were profitable. And they were out of Utah.

They were out of Utah, yeah. And actually the family there, they're the ones that created the Dell Sol apparel line. You might have saw Del Sol like, in. cruises or Caribbean look like it changes color the shirt when you go on the sun so they were going to use the same strategy which was online first means selling the product online then mal kiosk second and then retail third and so they ended up doing the same thing with zag and the thing just took off you know that second generation iPhone just they went from not they went from five million in revenue which is like nothing this is publicly traded five million in o seven to nine

19 million in 08 and went from one penny in earnings in Q2 of 08 to 5 cents in earnings in Q3 of 08. Basically, it's a 20 cent run rate. And meanwhile, everything else is going. Everything's cratering. So it took a while for people to pay attention and institutions. But ultimately, they did. They zagged. Yeah, into Zag.

And so, yeah, they zagged into Zag. And basically peaked a trough during the GFC when the S&P was down 42%. percent, Zag was up like 300 percent. And it taught me two things. Number one, even in that type of market environment, institutions were attracted to fast-growing, profitable businesses that they didn't own. You know, it's still got institutional inflows in that awful market environment. The second thing it taught me was even in the, when it was still microcamp.

Even when it was micro. Yeah. And getting back to the point about liquid microcaps underperforming, I think the reason it did well was because no institutions owned it. You know, there was nobody there to sell it. And what happens in those liquid microcaps and small caps, as you're well aware of, probably is like, as soon as the markets get jittery, everybody takes risk off. You know, and they take risk off, risk off assets, which are basically small cap, microcap.

And so there's institutionalized microcaps. Yeah, they'll go. The risk scale has that as a. Yeah. It's bidwack time. Bidwack time. And you just like it, you know, and so they're constantly getting bidwack. These small ones, there's ETSs and institutions don't own them.

So they don't own them to sell them. So if you find a good company that's growing revenue and earnings, you don't have the same amount of selling pressure or headwind in that market environment as you would if it's even a larger microcap. So that's one of the reasons, my theory, is why the performance has been so bad, you know, in that liquid microcap and a quartile or whatever he was showing his matrix compared to other ones. which seems too. If it's liquid, if it's trading a lot of money on both sides, there's people wanting to get out too, right? Yeah, exactly. Unfortunately for your, Zach, I've moved to no case on my phone, no screen protector.

I don't use one either. I mean, Zagg ultimately, so it went up, it ended up going from 60 cents to $16 in like 18 months, and then it ultimately got acquired. Not until like five, six years ago, though, 2020. What's your process? Like you'll get out along the way. Do you have a profit target or do you wait for some event like that? Once they go out of microcap space I'm getting out or once they get acquired I'm getting out? Well, there's a few different buckets there. But I'll say like probably the first reason I would sell is if I feel like my thesis is broken, which happens.

That's probably the number one reason. You know, because it's these are still fragile small businesses. And just the shelf lives on them are. shorter than kind of the larger cap companies. You know, and so like a lot of times the winning, these, even the winners have winning seasons.

They're not necessarily winning decades, you know, it's a small company getting a big contract. All of a sudden, they're growing 40% year over year because of this one contract. You know, and it shows amazing growth for four quarters, but management wasn't good enough to replace that contract with another one,

let alone two of them so they can grow for the second year. Or it's, you know, so a lot of times, like these winners, and microcap are kind of they win for two to eight quarters the ten quarters there's very it's hard to find ones that can grow sustainably over a decade um that's the goal that i'm trying to find but i'm trying to find those types of situations but there's a successful microcap investor is

it's it's a very high turnover strategy i'll put it that way yeah like you need to be on top of yes Mainly like one-trick ponies, right? For sure, right? Because they're not big, diversified conglomerates that could survive different things with a bunch of different product lines. You're on the same.

Yeah, exactly. Like there's, these smaller business is just like the small private business down it. They're just filled with concentration risk. You know, key man risk. They probably have the few customers,

probably selling a few products into a few jurisdictions or wherever, you know? So it's like just the volatility of outcomes, you know, is just wider. And usually bad outcomes. to be honest with you.

So you just have to be cognizant of that, that selling is a big part of being a successful microcap investor, is trying to keep your nose to what the business is doing and telling you and not staying around too long as soon as you believe that your investment thesis is cracking. So. And how are these founders and whatever execs at these companies in communication, right? Like it seems like they'd almost be too small to have the investor relations that other

groups analysts would, you know, rely on to get the data and the communications. Some of them, some of have no investor relation. I mean, again, a wide spectrum from, you know, nothing to they do have an external IR firm or an internal person handling IR. So you see everything in between. I think for me, what attracted me to the space was my experience with the XM satellite radio, you know, CEO 25 years ago, is just I could. could even access it. May I use coercive means to do so, but I could access them. And I think in general, the microcaps CEOs, they're fine talking to people as long as, you know, they're not asking dumb questions that they did they did their work. You know, it's just like put yourself in

your shoes. If you're a small business owner, it's like, you're okay talking to somebody if they want to ask you questions, but, you know, don't ask me what I do. Or, you know, it's just like, come prepared, you know, and there's enough information out there on these companies through financial filings and their website and different things, especially in today's day and age with AI, you can come with some good questions. And why isn't PE buying these things? Or are they?

Are they like snapping up? Yeah. So right? Just pull the whole thing out? Take it private? Yeah, we see a lot of that. Like, to give you an example, I think it was, I'm trying to remember the numbers I'll tell my head.

So even on microcap club, so the way you get into it, is it's free you know but you have to submit an investment thesis on your favorite my hair cap stock like a two to three page investment thesis and if you get enough votes from the members to get in you get in if you don't you don't so over over the last 20 yeah over the last 15 years there's like 1500 companies so like that that first post is like the the first post and then the discussion happens from there below it so we have like 1500 of these companies on there we track the performance of all of them from when they were posted and we have a member ranking based on you know how how how how many companies have a member profiles and their performance you know everything they profiled so we look at that data too but on those create your own index exactly yeah we have we've done that before and so the

so when you look at how many were acquired out of the 1500 I think it's like up to 380 or 370 something like that it's it's not it's not it's not an immaterial amount of m&A and it's usually coming from from private equity. Right, not a larger, a small cap, Brian. So do you get to travel a lot and go meet with all these groups? Like how often you're on the road and where are these? You're saying Australia, Canada, all over. Yeah. For some, you know, just like there's such a variety of companies and industries, same as up in large cap. Same thing for the investors, you know, like we have, we have deep value investors. We have hyper-growth investors, you know, industry, focus investors that only invest in oil and gas. You have the same flavors of investing down here.

My flavor investing the way I invest, which isn't the right way for everybody else, but it's very management focused. And so I do talk to management. I go visit them at their headquarters, every single one of them, you know, and I talk to them frequently. I don't care what you're doing. I care who's doing it. Yeah. And I, well, and I feel like in today's day and age with AI and pretty much anything that's publicly accessible becoming a commodity. You know, I feel like the edge is actually what the edge always was. It was, you know, this. Getting, getting across the table from somebody spending time around them for more than two or three hours so that you get past the sound bites and you get to see who they really are. You know, and that's what I try to do,

you know, with the management teams as well. All right. And then your 08 story of Zag, I love that name, by the way. Do you assign, do you, is your portfolio correlated to the overall market? Do you want it to be? Is it uncorrelated? Like, how do people think about that of like, this is part of my equity allocation or this is kind of an alternative allocation? I think if you're looking at microcap as a whole, you know, if you're looking at I shares microcap ETF, I think there's more downside when the market goes down normally and there's less upside when the market goes up. You know, you don't. Great. Like as a whole.

Where do I not sign up? Exactly. Hey, I'm something to sell you. But I think if you're looking at real stock pickers the way they do it, you know, in my portfolio, 15, it really, getting back to zag. It really zigs and zags, you know, it's like I can look like a hero in a bad market. I can look like an idiot and a good market and everything in between, you know, like even

COVID, when the market was down, what, 32% in a month, you know, during COVID, like we were down. 3%, you know, and it's just, it doesn't mean I'm like, amazing. It's just sometimes the position zig and zag too, keep on using that. So I think it's just, it really depends on where you're positioned. And, you know, I always, I don't pay attention to the macro too much, because I feel like if I can handle the micro, which is the company level, you know, is this business one that can grow through a recession? It's a very high hurdle. And that's meant to be a high hurdle. I don't have to invest in anything, everything I mean. Do they have a balance sheet that can endure, you know, a recession, God forbid, you know, just like these qualitative kind of filters,

do they have what I believe is good leadership, which I kind of define as intelligent fanatics, co-authored two books on that subject, you know, and so for me, pretty much the commonality across my positions, the way I invest is the leadership side. Like the more, the most important thing I look at is the CEO of the leadership team of the company. And what? So not necessarily correlated stocks, but is it highly correlated to rates? Like, is it, right? Small caps have basically just been trading opposite rates for much of the last three,

four years. Are these coming, maybe you're picking ones out that aren't heavily levered and don't have that rate exposure. Like, that's part of the puzzle for you? Yeah, I mean, exactly. Like, I'm trying to find solid enough, durable enough businesses that are also gross stories that also have a good story that a 15- I don't like increase in rates doesn't kill.

Yeah, like my, the perfect situation for me is actually finding, finding a business that's in a, in a tailwind, you know, where that's a theme, where that's a technological tailwind or what have you. And then finding the microcap

that is the best benefactor of that tailwind before it hits. So pretty scarcity, you know, and so it's kind of like a fire hose of institutional interest hitting like one or two things. And I've done well kind of with that theme of tailwind and scarcity. You know, I'm going to find unique businesses that are high organic growth rates because that's kind of what Zag taught us that are profitable. You know, institutions will find them and they will overpay for them. I'm going to find that you're undervalued that can get overvalued. And but what does that look like finding the company first and then buying into that tailwind or find? finding the tailwind first.

A lot of times it's a little bit of both. And the risk is you get in early. You know, early can be wrong if you get in too early. But a lot of it's both of that. You know, a funny story that another investment that I had is kind of a perfect example of the tailwind side. Before Facebook went public a year before, the only social media website that was publicly traded was capo.com.

It was a Spanish social network. It was a microcap. There's like a dollar a share. And I knew that there would be all this buzz about Facebook going public. You know, and so that was one of those things where I bought it because there was a tailwind coming and there was only one thing that institutions or anybody could buy, you know, if they wanted another way to play that social media trade, you know, and that KPasa.com, you know, 10x and 12 months, you know, just because that played out, you know.

So you can kind of find these areas like that in different ways. I don't really, I'm not looking really to find a fatter trend like that, but that's kind of a good encapsulation of what I'm talking about. Like find a tailwind, you know, where there's only one or two benefactors that are a high growth company that's profitable. Like that's the secret sauce. Right, but you're not out of like, yeah, I can't even think of an example because my brain doesn't work like it, but like out at the mall, no one goes to the mall anymore. But whatever, you're in the airport and you see all the people in leisure wear or whatever. And you're like, okay, let me find one of these small leisureware groups, right?

Yeah, Viori. Maybe Viori was a microcab. I don't know. Probably would have been a good Peter Lynch example. I mean, a lot of the things that trigger, honestly, the thing that triggers me most to a situation is the management team. It's usually a management change in a small company, and it's usually the type of management change where you look at their bios and you see that they had a lot of success in the past. These are repeat winning people joining some obscure, really small microcap company, you know, and just leads you to believe, like, they're not here to waste time and waste their money. They're here to bring the team back together again and grow something again.

And so that's sort of a, that's one of the main things I look for is kind of management transitions with repeat winning management teams that are almost overqualified to be in charge of this microcap company. Yeah, yeah. Yep. Which we did a podcast with Roadrunner, I believe, or Echo, Echo Logistics or something, right? One of these backhaul booking companies. And that founder, he had a separate, like, consulting company that he would kind of come in. He's like, okay, fix this now. Moving my whole team.

Now I'm going to come in, fix this one. Yeah, yeah. You got a book coming out. Let me guess what it's about. Microcaps? Large caps now. Yeah, large caps. Tell us about the book.

How, this is your first book? Sort of. I mean, we co-authored two books on that topic of intelligent fanatics like 10 years ago. So this would be like the first one I did like on my life and journey and things of that nature. So I know microcap investing. So I would say it's my first book. It doesn't relate to that. But yeah, it's coming out September 15th.

It's called Stock Picker. It kind of retells my story and my narrative. You know, some of the lessons I've learned investing in this volatile investment class over the last 20 years. So, you know, I think people have been drawn to my narrative over the years, you know, first from the pursuit of just being a full-time investor, private investor, just living off your own portfolio for 10 years and raising a family and having the emotions of having to pay bills and a drawdown. You know, and so I get to retell some of that. um you know and also what does that does that mess with your thesis because you need to like distributions and stuff right you need money coming out now it's or is that maybe a good thing because that forces you to exit i think it's it's it's difficult i think depending on your strategy it could be

more difficult like for me i think if you're a traitor you know your your duration of your hold time is less you know i don't think it's probably as bad because your your your trading frequency kind of mimics getting a paycheck you know but if you're more of a longer-term investor like I am where I don't know if my returns coming in six months 12 months or 24 months and I might have to be down 30% before I get to the other side you know that's that's where it gets more emotionally and psychologically problematic and so yeah you know for me when I made the decision it was actually less about what I thought I can do with the portfolio every year you know I think I

can do 25% for the next 10% 10 years. It was less about that and more about what's the pain that I can endure and not change my strategy, like the amount of money. And having gone through the GFC, you know, I kind of figured, okay, I need an amount of money where I can go down 50% and it's not going to change who I am and the strategy. And I need to put away two years of cash from my living expenses so I don't have to sell at the worst time. So you kind of set up these safeguards, depending on your strategy and your financial situation. And listen, when I did it too, I was single, you know.

And the next year, yeah, next year I got married and then you layer on that and kind of the increased financial burden because, you know, wives don't like to rent. They like to own a house. I had to buy a house, you know, and then you have kids. And so it just kind of waits on you more and more over time. But that's just part of the process as well. So there's a lot there to unpack. Yeah.

That's why I, a friend of mine, private equity in the city here, and he rented for ages. And he's like, no, this capital is way better in the investments I can identify than like sitting in this stupid Chicago brownstone thing. I would still, I would still be renting today. If it was up to me, let's put it that way. Right. It's like a little, it's like a cheat code. It's like a portable alpha kind of thing. Like, hey, right, this capital doesn't need to be tied up over here. Well, it's, and it's also like it's an interesting, like just with my wife, her understanding kind of our situation and how that's different. Like, you know, There's no, like, well, how do we save for our kids' college?

Like, how do we do this? And because I'm just like, there's no such thing as savings. Like, it's just spending, just different degrees of spending. Yeah, that's what you sound like Jason Buck. Did you teach him that or he taught you that? I don't know. I don't know. We've talked about this before.

Yeah. Yeah. He's big on that one. There's no such thing as savings. I'm like, well, okay. I had, the last podcast was an investment advisor. I was like, you need to start telling people. when they meet a girl in the bar,

start saving for elementary school, right? Because Chicago's, like, grade school costs $40,000 a year. It's ridiculous. You know to start saving when the kid's born, but you need to, even before that. Kids are expensive. Like, my buddy who lives in Chicago,

his kids into hockey, and I was like, he's like, Ian, he's like, I think I spend, like, $20,000 a year just on hockey. I'm like, it's just ridiculous. It's like the most blue-collar sport that you would think would be the cheapest is the most expensive, you know?

No, those. sticks are now like 600 bucks or something like they break all the time my my buddy's like oh there we go i see him in the stands the stick breaks it's just like crap um and so in the book do you go into like how much you think people should like what's your what's your end goal to get people into this space like you should be putting 5% into it 10 50 or just like who cares if you get one guy who's like i love this space and let's let's wrap about it yeah i mean i think the well first of all the purpose of the book was just to retell my story, tell people more about investing. I think people are generally interested in full-time private investing. I think people are generally interested in finding small

companies before they become big. So I think it's a, and I think I laid out pretty well. Like this is, this is not an invest like me book. This is not a guru. Look how smart I am book. This is more me retelling my story so people can see how I attacked some of these things. And then hopefully that without having to go from 120 to 8. Exactly. Without having to do that. Although, you know, a lot of times, you know, those are the most informative and educational

or the painful lessons too. So, you know, they serve a purpose too. But what's your answer to that? If someone wants this in their portfolio, A, how do they get it? And B, or can't they? And it's just like, no, you're either in this stock picking world and you're a stock picker or forget about it.

Own the SPY call today. You know, I think if you want to be an active stock picker, and you're willing, not willing, you have to do your own work, you know, because these companies that are small, there's no analyst covers. There's no safety net there of institutional backing. Like, you have to do the work yourself. And if you're not willing to do that, you know, don't expect to outperform by subscribing to somebody, by, you know, getting somebody's next greatest picks because, you know, if you're trying to outperform by doing that, you're just not going to do it. It's just going to end a disaster. But I think there is a certain percentage of people that

do want to be in control and they do enjoy the process of investing investing in doing primary research and i think for them it makes a lot of sense but you're you're also going to lose money along the way and that's that's part of the that's part of the journey um but from when it comes to allocating the microcap like i have a fund now so i can't call myself a full-time private investor launched a fund in 2019 and that's where all my money is and i'm about 60 partners in there but what i tell people for that is, and I'm genuine, like, I'm not looking to invest all of your money. You know, this should be like 5% of your investable portfolio because this is a volatile, a very volatile investment class

that, you know, when the S&P does this, we're going to be doing this, you know, and you have to position size it accordingly to have the duration to get to the other side of outperformance, you know, on this investment class. Because there's years that you're going to look like an idiot, even though the market's outperforming. you know, and all those things. So, um, so position sizing, you know, is important. And for, but for me, you know, even the fund, like we're, we're not an institutional fund, you know,

it's like what I found is the best investors, like for my fund or small business owners, you know, because they gravitate to this type of investing because it reminds them the businesses they own or owned, you know, and they, it's almost right, like, hey, I'm killing myself making this thing profitable. If I could get access, what if I had 10 of those? Yeah, yeah, yeah. without actually having to have 10 of them. They just have an affinity for the space and they understand volatility with small business because they ran one before.

But are they wanting to know too many details? Like, what's this company doing? What's their... I think they're... Manufacturing their widget X. I think a lot of them, I mean, they can become really good assets to the fund manager because there are certain

these individuals, you know, small business centers that have some expertise and knowledge in a specific area that can be an asset to me. So I do use them kind of as assets, you know, when doing research or diligence. And, you know, not all of them want to get in the nitty gritty details. They trust me to do that. But I tend to think that and believe and know that they're just a better investor for my type of investing, you know, because they naturally do the right thing instead of the wrong thing during drawdowns. You know, during COVID when we were down, you know, with the market before we bounce back.

You know, nobody was calling screaming at me for being down. It was, is now a good time to add. You know, because they already have that volatility mindset in their head, you know. So there's a better investor than an endowment looking to place 10 million. You have to worry about the CIO changing over. Right. And how big could that get? Like, then you have to, you have to worry about capacity there so you can keep getting in and out of things.

Yeah. So, like, we're pretty small. And, well, by fund standards, we have 40, million and that's a good size. You know, I don't usually lead talking about the fund because I don't really want to market it. Usually people kind of can self-select in and we don't, we open up and we're down a lot sometimes, you know, that's the right time for people to come in. But right now we've, we kind of have a hybrid approach, the microcap space, which has been,

it's been fun because we have taken kind of a private equity plus a microcap buying the open market, but doing like small strategic placements in some of these companies, providing them some growth capital, you know, as well as buying the open market. So it's kind of a mix between, I would call private equity and public equity. Yeah.

Why not make, why not have the fund become a microcat? You can have a nice little. I think history, history has shown that most people that like try to do, you know, whether it's internet capital group from way back in the day or that, you know,

it just, It always trades well below NAV and you never get a preview. So what's the point? Yeah. I guess like most all those black zone and all those have traded way below. Yeah. We'll finish it back to Philly Sports. Your Mount Rushmore, your top four Philadelphia athletes all time.

Well, any sport. I've never really been a hockey fan, so I feel bad. So that completely gets out of the window. So I probably stick to, I probably stick to baseball because that's all. always been, I just like Mike Schmidt. And because I've been to a few games during the 2008 years, you know, like the Ryan Howards of this world, but also the 93 Phillies. I love Lenny Dykstra and John Kruk. Correct. He looks great these days. He does. Yeah. Yeah. Yeah. No, he does. And so, yeah, I don't know. I'm, it's hard for me to say, like, I definitely have my favorites, you know,

but it's hard to compare one generation to the next, you know, just like everybody tries to say so-and-so, the next Jordan or something. It's just that you just can't do that, you know, although Jordan is the best, but as you're hearing on this. Thank you. Thank you. You're welcome. Required to say that.

And now you've got LeBron, speaking of Jordan. Yeah, I know. I'm looking forward to that. Tickets are higher now, but it's okay. And give me Eagles better, worse, same as last year? They're just so hard to predict. I find it very frustrating. I'm an Eagles fan, but I'm not like a die-hard, you know,

I'm going to beat you up because you have a Cowboys jersey on type of fan. Yeah, that's my brother-in-law. Yeah. All right, Ian, it's been fun. Thanks so much. Tell everyone where to get the book. We'll put a link, but it'll be out Amazon. Yeah.

Where do they get it? The book's called Stock Picker. It's going to be on Amazon, you know, everywhere that books are sold. It's going to be out September 15th. Yeah, so hopefully you go out and get it. You can find me on X, which is just my name, Ian Castle. You can find me talking about stocks and stuff like that on microcapclub.com. You can find me in person at our events at planetmicracap.com.

Love it. Cool. You need to come do one in Chicago around all that Philly Chicago sports action. We used to have it in Chicago. Oh, nice. Yeah. Awesome. Thanks again.

Okay, that's it for the pod. Thanks to Ian. Thanks to RCAM for sponsoring. Thanks to Jeff Berger for producing. We'll be back next week, I believe. Maybe the week after that, stay tuned. Peace. Go bears.

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