The Pomp Podcast - 345: Ian Cassel on Micro Cap Investing

Episode Date: July 25, 2020

Ian Cassel is the founder of Micro Cap Club and CIO of Intelligent Fanatics Capital Management. He has spent the last 20 years learning about and investing in micro cap public equities. In this conversation, we discuss the micro cap sector of public equities, why the smallest decile performs best, liquid vs illiquid opportunities, what Ian's process looks like, how he thinks about portfolio construction and diversification, what the impact of the pandemic has been, and his best and worst investments so far.  When the New Yorker magazine asked Mark Zuckerberg how he gets his news he said the one news source he definitely follows is Techmeme. For more than two years and nearly 700 episodes, The Techmeme Ride Home has been Silicon Valley’s favorite tech news podcast. The Techmeme Ride Home is a daily podcast, only fifteen to twenty minutes long, and every day by 5pm eastern its ALL the latest tech news.  =============================== The Trends premium weekly report helps you understand market trends poised to skyrocket and how you can pounce. Join the private network of 5k+ builders, founders, and investors spotting tomorrow’s trends. Expand your network, and discover the next big business idea before it explodes: https://trends.co/pomp/ =============================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Ian Castle is the founder of MicroCap Club and CIO of Intelligent Fanatics Capital Management. He spent the last 20 years learning about and investing in microcap public equities. In this conversation, we discuss the microcap sector of public equities, why the smallest decile performs best, liquid versus illiquid opportunities, what Ian's process looks like, how he thinks about portfolio construction and diversification, what the impact of the pandemic has been, and his best and worst investments so far.

I really enjoyed this conversation with Ian, and I hope you do as well. Before we get into the episode, though, I want to quickly talk about our sponsors. The first is a new podcast by TechMe. When the New Yorker magazine asked Mark Zuckerberg how he gets his news, he said the one news source he definitely follows is TechMeme. For more than two years and nearly 700 episodes, the TechMeme Ride Home has been Silicon Valley's favorite tech news podcast. The TechMeme Ride Home is a daily podcast, only 15 to 20 minutes long, and it's out every day by 5 p.m. Eastern so that you get all the latest tech news. But it's more than just

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bunch of people who work at The Hustle who put this together and they're doing a fantastic job. They've built a private network of over 5,000 builders, founders, and investors that are trying to spot tomorrow's trends. They share ideas, they analyze businesses, and they genuinely look for the next business idea. If you haven't checked it out yet, I highly suggest going to trends.co slash Pomp. Trends.co slash Pomp. I love it. I've gotten tons of ideas there and everyone generally is super smart, a self-starter, and very entrepreneurial. So if you're looking for a community and also a weekly report that helps you understand market trends, go over to trends.co slash Pomp. Lastly, don't forget that I write a daily letter to over 50,000 investors about

business technology and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at Pompletter.com. Again, Pompletter.com. All right, let's get into this episode with Ian. I hope you guys enjoy this one. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for

informational purposes only. All right, guys. Bang, bang. We've got an awesome guest today. And Ian, thank you so much for taking the time to do this, man. It's an honor to be here. I'm a big fan of yours and just really an honor. Yeah, well, listen, I always ask people for questions beforehand. And every once in a while, I am overwhelmed with how many people want to know information. And yesterday was one of those times. So let's, let's not disappoint everyone. I feel like no pressure. All right. So for the people who don't know you, let's just start off with background kind of what did you do before you got into micro cap stocks? well it's a it's a good question to start off i mean all i've been doing honestly since i was a sophomore in college has been microcap stocks and you know there's a long version of this story but i'll tell you the short one um when i was a sophomore in high school you know my parents

kind of sat me down said you know we saved for you twenty thousand dollars you know since you were a baby this is going to be used for your college education we want you to know now what you're getting so you can choose where you want to apply yourself. Just know that this is all you're getting and you can decide. And so at that point in time, that was 1997. So right in the heart of the internet technology bubble, they introduced me to their financial advisor, opened up an account, put that $20,000 in it. I started talking to him about small cap tech stocks. I got really engaged with the thought of that, just like everybody else at that environment. And just like that, just like that in that environment, you know, you go through a dart at a bunch of

technology companies and made two or three X on your money really quickly. And that's what happened to me then. And so I caught the greed bug, if you want to call it that in high school. And then by the time I, to make a decision on college, I chose to go to a local university, one that was less expensive and one that I could kind of work full time as I went. So I could invest that money that I had grew up to that point into the stock market. So that's ultimately what I did. I ended up working for an Edward Jones financial advisor here locally, was more or less a glorified receptionist there for many years,

actually a few years leading into the end of the technology bubble. And then when the technology bubble burst, I was also working there. And, you know, really I learned a couple lessons there. Number one, that about $120,000 that I'd grown up to that point ultimately fell to about $8,000. So I learned some tough lessons with losing money, but also, you know, I was more or less a receptionist at that financial advisor office. So I was the one taking phone calls from, you know, the thousand clients that we had and talking to them and they were in, you know, every emotional state that you can imagine. And at that point in time, you know,

I thought I was going to be a financial advisor and going through that experience. You know, I just said, this is the last thing I want to do. You know, investing is hard enough, just dealing with your own emotions, let alone the emotions of other people. And so really from that point forward, you know, I got introduced to microcaps because some of those small cap tech names that fell down through the floor became microcaps. And also it kind of set me on my path of, okay, I don't want to be a financial advisor, but my goal from that point forward was to be a full-time private investor, just managing

my own capital. And that was a goal I'd set out my sophomore year in college and several years later achieved that. But really my first entree into microcap was a company called XM Satellite Radio, which later merged with Sirius, which I'm sure many of you have in your cars. And when I was in college, I found out that that company, which was microcap back then, was presenting in New York City. And I had some fake business cards made from Castle Capital, talked to the conference organizer. They let me come up to New York. I took a bus, um, weaseled my way into a one-on-one meeting with the CEO at the time, Hugh Pinero of XM satellite radio became enthralled with that story. And it was a story mainly back then. And back then, you know, 40% of their shares were

held short. So everybody was betting on that company going bankrupt. Um, but ultimately took that $8,000 I had left from the crash, put it all into XM at a dollar 78 per share. And, um, This is 185% luck, but they all of a sudden started signing OEM agreements with Ford and GM. They refinanced their debt, and ultimately, it was a huge short covering rally that propelled that stock from that $1.78 to $1.34 in about 14 months. I tell that story, and very quickly on this forum, but I tell that story because that's what got me started in microcap, And it was really that ability to sit down with a management team face-to-face. And that's what kind of drew me into the space. And, you know, that was 2001, 2002.

And from that point forward, just kind of learned the ropes of micro-cap investing by losing my money and making it back and losing my money and making it back. And that's how you learn a lot of things. And that's what I did as well. Absolutely. So before we kind of dig into some of the details here, right, I know there's a ton of people who are interested in public markets that are going to be listening to this. But for those that don't know what a micro cap stock is, maybe just kind of give us some definition.

Sure. So if we're looking at all public equities in North America, there's approximately 20,000 stocks that trade in North America. So I'm combining the U.S. exchanges and also the Canadian exchanges. And if we're looking at micro cap companies, let's define that as having market capitalizations less than 300 million. And of those 20,000 public equities in North America, approximately 50% or 10,000 of those companies are actually these small micro-cap companies that very few people have heard of. So that's kind of how I define the space, and I could define that down a little bit further in regards to my personal strategy, but that's kind of vaguely how you define it. Okay. And then I've seen on some of the materials you guys have and website and stuff like that, that actually the smallest decile performs best. And so I think this is kind of what you're talking about with the story around XM and just kind of generally why people would be interested in these

very small market cap stocks. So maybe talk a little bit just kind of historically, how has this performed against other types of public equities? Sure. So again, there's 10,000 microcaps in North America, under 300 million. And if you actually pull the CSRB data, you can actually get a member of microcap club pulled the data and it was through, I think, 2016. But from 1927 to 2016, the smallest decile of the public markets, which was sub $114 million outperformed all other market cap classes and by a wide margin. So smallest decile, sub $114 million, outperformed all the other deciles since 1927. And I think it's around 17% compounded compared to 12.5%, which is the next highest decile. So the next highest

decile sub 500 million. So you really want to, or at least I have been focused since the start of my career on the smallest decile. And the reason for that is these companies are so small, are so illiquid that institutional capital can't invest in these small companies. And it's why I believe kind of the small micro cap ecosystem is one of the best places for a small astute investor to get, call it irrational returns, because you have this structural advantage to where larger, smarter money can't invest in these small companies until these companies execute and their stocks go up and their liquidity increases. And it allows those institutions to then take part in these equities. And so what happens is when you have a small company that

executes, their stocks rise and you see these greater and greater waves of capital because institutional capital can flow into them at that point in time. And then to take it a step further, not only the smallest, but there's some white papers done by Roger Ibbotson called liquidity as an investment style. So he analyzed illiquidity as a factor in regards to performance. And what he found going back to, I believe, 1971, looking at around 3,500 public equities was actually the best performing companies since 1971 were the illiquid microcap companies. And believe it or not, the worst performing area to be in was the liquid microcap companies. So best performing illiquid microcap, worst performing liquid microcap. And, you know, I think one of the reasons

there is, and I have some experience through investing through the 2008-2009 crisis, is, You know, the larger micro-cap, the $150 to $300 million market cap area, the larger half, they're very institutionalized by that point in time. And usually when the market or the economy starts to teeter and these institutions want to take risk off or their investors want to pull capital out of what is seen as a riskier equity, they pull it out of those funds, out of those indices, you know, the Russell micro-cap index. and they usually get hammered really, really quickly. I mean, it's just a constant bid whacking, you know, when the economy starts to suffer a little bit. And I think that's why actually, you know, this history has shown that, you know, liquid microcaps are some of the worst places to invest, but illiquid is the best. Yeah. And so maybe help us understand, um, when we're talking about a 300 to $500 million company, how liquid is liquid, right? When you talk about that and

then how illiquid is the illiquidity that you're talking about? Are we talking about literally hundreds of thousands of dollars in kind of daily volume when you're talking about illiquid and tens of millions in the liquid side? Or just kind of give us some milestones, if you will, in terms of how you think about that. Sure. I think a good way to think about it is, let me give you kind of an example of a typical kind of micro cap that I would invest in. Let's say it's, not to name a name, but micro cap XYZ. The stock is trading at $1.30 per share. Let's say it has a market cap of 50 million five zero you know i would say on average that that micro cap might trade 20 30 000 shares per day so you know that might be 40 000 of volume per day

trading in that small micro cap company you know also you know there's zero analysts covering that there's very little institutional ownership a lot of times these companies are traded on the otc the OTC markets, not on the NASDAQ or the NYSE. And so when you compare that to maybe a $500 million market cap company, you know, there you might be looking at a $5 or $10 stock that might be trading, you know, maybe a few million dollars of volume per day. And they probably have five or six analysts covering them, you know, not nearly as much as something like a large cap, like let's say Target, which everybody knows, which probably trades around $115 per share, trades about $400 million of volume per day, has about 40 analysts covering it,

1900 institutions that own it. So that kind of gives you kind of what I'm talking about from illiquid micro cap to liquid micro cap to large cap, what it kind of looks like, the difference. Got it. And so help me then understand what the process looks like. I think a lot of people understand, you know, there's like the angel investing in all the private markets and venture capital. And that's pretty well documented. There's also kind of what I'll consider the both professional and retail, like large cap, you know, you've got the hedge funds who kind of have a process that they're going through, and a lot of it's publicly available information, and they'll go do crazy stuff like, you know, snapshots of the parking lot or try to get the oil levels and all

that kind of stuff. And then you get Robin Hood type traders, you know, who basically are just letting it fly and not doing a lot of research. The micro cap space feels like it's actually very process driven, and very different than kind of the large cap space. So just help me understand, like, what does that process look like? And what are the differences to maybe what people are doing in the large cap space? Sure. What's interesting about micro cap is you have the same types of investors investing in these companies as you do in the large caps. And what I mean by that is, you'll find deep value investors investing down in these small micro caps, you'll find Value investors, growth investors, life science investors, technology investors, mining, pretty much all those different areas of investing you will find down in micro-cap.

It's just that these companies just tend to be smaller. And so everybody's process because of that is a little bit different from everybody else's. I would say the main difference is that we're talking about 9,000, 10,000 micro-caps in North America. um you know there's still another metric you know there's 10,000 microcaps but there's still 7,000 of them under 100 million microcap so a majority of them are the smaller ones which is which is good um and I would say the the main thing there is you don't you you have to do the work you know that there's no analyst report to pull down and do research with you're the one that has to actually do the work due to due diligence read the filings read the financials

communicate with management, all of these things. And so the process is different overall, but you know, everybody's process is a little bit different. You know, I don't, I don't use screens very much to find ideas, but some people do, you know, if they're more kind of quantitative, you don't want to find, look at all stocks, you know, under book value or something like that. But for the most part, you know, how you find or how I find ideas, I wish I could just point to one resource but a lot of times it's just through brute force research going through every microcap company a through z i mean i'm actually in the process of doing this in the uk on the london aim exchange looking at the the microcaps on the the aim exchange in london literally going through

a through z and it's very tedious but you know it's the only way you don't miss something a lot of times your edge in this business is your ability and willingness to kind of sift through a mountain of uninvestable ideas trying to find that needle in a haystack so brute force is a big area of how do you find these networking you know just through the years of me doing this i have personal relationships i talk to people i talk to every week on the phone people that invest similar to me people that invest differently than me you know just trying to see what people like you know when i was starting in microcap all the activity around these smaller microcaps was on public message boards like raging bull yahoo finance investors hub uh and now that's kind of gravitated

to seeking alpha and some and some private forums just like you know microcapclub.com which uh which i founded and so you're you can find valuable discussions there you're just looking at prs filings i do sometimes do screens i don't find them very useful um you know serendipity you know just stumbling on an idea just keeping your eyes and ears open but those are primary areas to find ideas um you know you have to use all of those tactics to try to find these these companies and that's that's what we're trying to do here i mean we're i'm trying to find great companies early you know i'm not a deep value investor um i have don't have a willingness to want to buy something that's undervalued that will stay undervalued i want to find something that's undervalued that

can get overvalued um and that's primarily what i'm looking for and but that might be different from other people that are even successful you know in the microcap arena i know a lot of successful deep value investors that have an incredible performance. So that's how I would find them. And then when you go to analyzing the ideas, everybody kind of analyzes differently. Some people don't believe that management is important to talk to. Well, I take the other side of that. And I believe management is very important to talk to because the smaller the company, the more important management becomes. A lot of times these CEOs aren't just the CEO, they're the chief marketing officer, they're taking the trash out, they make the coffee in

the morning, you know, they wear a lot of hats. And so you want to make sure the person leading that company, you know, is the right person. So, you know, in addition to that, you know, a lot of it, microcap gets a bad rap, because of a lot of the headlines you'll read about microcaps, also known as penny stocks is, you know, some of the bad stuff that happens. Yes, there's some fraudulent companies down in this arena. Yes, there's companies that probably shouldn't be public, but I would say there's probably far less as a percentage of the whole than when compared to private equity or venture capital. And the information that's available to investors. So when you're analyzing this, does this look like you get your S1s and 10Ks

and kind of all the traditional public filings that a large cap company would do? Or is there some different type of information that is available or not available? For most of the microcaps, they file with the SEC. They have audited financials. If they don't, many of them, and I would say, let's call it 70%, 80% of microcaps, they're just like looking at Google where they file their financials on sec.gov. You can look through them. You can find that information. And you can have some comfort in the fact that they are audited financials. Then there's also some other ones that don't file with the SEC, but they still file audited financials on otcmarkets.com. And then there's another level lower than that, which, you know,

I try to tell people to stay away from. Those are companies that actually don't report anything, and they're kind of the dark companies. And so, you know, I get asked a lot, you know, if I want to get into this space, what should I focus on? And I tell people, you know, if you want to really get rid of a lot of the risk, you know, focus on the companies that are filing with the SEC and focus on the companies that are actually making a profit. About 18% of all the micro caps are profitable. So you'll, you'll, you know, save yourself a lot of pain if you just focus on the profitable ones when you start. Yeah. And to me, this feels like, and I've joked with people before, micro cap investing is very similar to venture capital investing. It's just a different type

of company has likely chosen to go the venture capital route versus the type of company that's chosen to get into the public markets early in its life cycle. And so how do you look at that difference or similarities between micro cap investing kind of, you know, let's go to kind of lowest decile, so kind of sub 115 million to maybe kind of series A, series B type venture capital investing? Well, you know, we could probably spend a whole podcast just talking about this, but maybe the first thing I'll say is, you know, when you're looking at small companies, whether it's private equity, venture capital, and then there's small public companies and everybody loves to glorify venture capital, everybody loves to glorify small private equity.

Everybody likes to beat up on old micro cap, you know, as an investment class. And, you know, a lot of people forget that, you know, some of the best investors ever started here, you know, Warren Buffett, Peter Lynch, Joel Greenblatt, they all started in these small micro-cap companies. It's just that their net worth grew and they grew out of investing in this class. You know, and the best companies ever, like Walmart, Netflix, Celgene, Intuitive Surgical,

they were micro-cap companies. You know, Berkshire Hathaway was even a micro-cap when Buffett took it over on an inflation-adjusted basis. You know, the best performing companies ever started out of micro-cap, you know? And so all these great investors, all these great companies, all these great returns came out of micro-cap.

And yet, I'm guessing that a lot of people never heard of them. And, you know, it's a shame because the most powerful force, at least in public markets, is the discovery phase of a great business when it's small, you know, and that's what we're looking at. And so, you know, it's a big reason why I'm active on social media. It's not because I want to pull people into any of my brands because a lot of what I do is capacity constrained. It's mainly just to keep the light shining on this space, you know. Um, so when we look and compare them to kind of private equity, you know, here it really changes geography based like here in the US, uh, historically, and a lot of people don't

talk about this either, Anthony, a lot of people talk about the decline in public companies, you know, over the last 20 years. Well, a lot of that decline, I think really started aggressively happening in 2010. and the reason for that is you had a lot of reverse mergers happening pre-2010 a lot of then the China frauds occurred kind of 2010-2011 and so that really cut down on the amount of reverse mergers that were happening and so up until 2010 we averaged 800 reverse mergers a year so 800 companies going public a year as microcaps and yes maybe 90% of them you know went away or shouldn't have been public or whatever but it's kind of law of large numbers you know a certain

percentage of them would have graduated up in a small cap, you know, and became listed. And since 2010, that 800 a year has went down to about 100. So, you know, it's a really big fall off that I think that's been impacting the public markets as well. And those companies, when they went public, I mean, you're talking about a company that would raise, that had the ability to raise a million, 2 billion, 3 million, and then just go public. You're not talking about 20 million, 30 million dollars from any small, you know, raises. And really since 2010, kind of the micro cap in the U.S. has been kind of on a downdraft, I would say. But the opposite can be said in places like Canada and Australia, to where they still have very active micro-cap markets where they're going

public, raising $5-10 million, and going public because they don't have as robust of a venture capital or private equity scene as we do down here in the United States as well. And they're populist, meaning they're very resource-centric in Australia and Canada. They're not as risk-averse as we are down here. And it's hard to find a Canadian citizen that doesn't own a junior exploration company in Canada or something like that. And so it's just a very, it's a much more active scene in those two geographies compared to the US. I don't know if that helps answer your question. No, no, it does. And how do you think about portfolio construction, right? So our mutual friend Adam Singer said to ensure that I ask you about kind of concentrated bets versus

diversification and he said you had a kind of a lot of thoughts around especially since you're investing in a sector of the market where you're not going to kind of get the you know eight percent growth year over year and and really what you're looking for is a company that's small today like you said that they can kind of grow into something much much larger over time so how do you think about diversification versus concentrated investments well you know kind of first when i talk, when I talk about micro cap, it's probably similar to how you would, I don't want to put words in your mouth, but it's probably how you would talk about Bitcoin for you, where it's like, you're not telling people to go a hundred percent, you know, into, and it's kind of what I say with

micro cap, you know, I'm a little bit of an oddball, you know, this is all I know how to do. And so, you know, 95% of my assets are in micro cap companies. And that sounds completely deranged to most people. But I, you know, I tell other people, you know, this is kind of something where you look at your portfolio and can you devote 5%, 3%, whatever percent to these small growing emerging companies. And I think that probably makes a lot of sense to most people, you know, to get this appetite into their portfolio. As it relates to my portfolio construction, it's actually evolved quite a bit over the years. So, you know, when I was building my capital in the early 2000s, so I went right from undergrad, graduated there 2003, went right

to graduate school at Villanova until 2005. And then I worked for a small IR firm for six months, then started my own little firm. And basically, I was just trying to cover my expenses until my portfolio grew to a size where I could just quit all of that and just manage my own portfolio full time. And that's what I did in 2008, in the depths of the crisis. But while I was doing that, while I was building that capital, I was in three or four companies. I was very super concentrated. And I was willing to take that type of risk, make those types of bets. And so it was not unusual to see 50% of, you know, my net worth in one company. And it's not something I advise other people to do, but it's just how I did it. And then as my portfolio has grown in size, you know, I've

become a little bit more diversified, but I'm still talking about a dozen equities, you know, which, again, most people would still say is insanely concentrated, but that seems very diversified to me. And usually what happens with my own portfolio today is, you know, I'll usually take a position at to 5%, 10% at cost, and then let it run, you know, where before I would probably take it up to 25 or 30%, like right away. You know, what I've what I realized over the years is, It makes sense to buy a little bit, wait for these management teams to prove themselves, and then don't be afraid to average up. Some of my biggest winners over the years have been coming from averaging up into a good situation, not constantly averaging down in something that's disappointing you. And so that's a little bit how my portfolio has evolved.

So today, I'll let something get up to maybe 30% of the portfolio, a single position, and I'll just start shaving it back a little bit, 25, let it go to 30 again, shave it back to 25. you know, that type of thing. And usually the ones that I keep at 5% to start that aren't exactly performing, I don't add to them very often. You know, I want to let the companies that become larger in my portfolio have earned the right and the companies that don't haven't. That's kind of how I view my portfolio construction. Yeah, it's really interesting because you're hitting on two key themes that I think everyone likes to talk about, but it's really hard to do and people get nervous when forced to do it. But the first is, concentration builds wealth and diversification protects it, right? And this is kind of tried and true over the years, investors in all kinds

of different sectors kind of all talk about that, which you just did. And then the second thing is this idea of the best investors are really pressing their winners, right? So it's kind of an average to good investor will make a small investment, it'll go up three times, you know, three x, and all of a sudden, they're like, you know, I hit a triple. But the best investor actually sees that and has conviction that, Hey, this is going to go up 15 times or 20 times. And they'll start adding to the position, even though it's already gone up three X and kind of this averaging up and just really pressing into, Hey, I was right. Right. And I think I'm going to continue to be right and not being afraid to kind of pay up more for a company, uh, in the future, um, as they've

actually earned kind of to your point, the right to have that new valuation on their path to, you know, what could be higher gains. Yeah, exactly. Especially it depends on how you invest. Like I said, I'm trying to find companies a lot of times at the inflection point of profitability. And so, you know, a 10 bagger in my world is something that is losing money, breaks even, and starts making money, you know, and that can happen over a few quarters or a few years. But, you know, something that loses 10 cents a share to breaks even to earns 10 cents over a year or two, you know, that's a 10x, you know, and so the further back you go into that unprofitable camp, the more risk you have. In the smaller position, I usually make it at the onset.

And once that reaches profitability and once they prove themselves more and they get to profitability, that's when you kind of have a place to really press your bet, if you will. Or you just leave it. You don't devote more capital to it. You just let it alone now. You let it grow as a percentage of the portfolio, which is what I also do. But usually at the onset, I got lucky kind of early in my career when I was really building capital and a couple ideas where I pressed the bet hard out of the gate and I ended up being right. And that works when you're right, you know, and it doesn't work when you're not right. And so now I kind of eased back a little bit, make a smaller investment and just, I'm much more active to add to that position now.

How has the pandemic changed the way that you look at investing in this sector? Or maybe it hasn't changed anything at all, but like what's been kind of your experience over the last couple of months as the pandemic and then the economic recession? You know, in micro-cap, it's been a little bit bifurcated where the micro-caps that trade in the NASDAQ and the New York Stock Exchange because the Russell indices have been ripping, you know, they've been having that tail, that constant inflows coming into those equities. And so the list of micro-caps have really done well, It really outperformed. And I'm finding a lot of the ones that are in the OTC, again, the ones that aren't institutionalized, you know, that aren't in those indices, that aren't in a lot of micro cap funds, you know, haven't had those same tailwinds. So you can still kind of find value, you know, if you will, down there. And so that's one of the dynamics I've been seeing even my portfolio today, which is probably 50-50 listed companies versus OTC. The OTC ones are definitely underperforming the ones that are listed right now.

But, you know, kind of how my portfolio, what I generally look for is four main things when I look at a company. And this has evolved over the years. But, you know, even before COVID, you know, I'm looking for a business that can grow through a recession, you know. And so you immediately take 10,000 microcaps, you know, just put that filter on it. It probably takes it down to 8% of that ecosystem, you know. Then I'm looking for a balance sheet that can weather a storm so it can act with occasional boldness during a recessionary period. That takes that 8% of the 10,000 companies down to probably 5% or 4%. And then you're looking for a stock that can conservatively double based off fundamental underpinnings over a two- or three-year time period.

And then I'm looking for an organization that has what I believe is kind of that intelligent, fanatic-type leadership. And so those are kind of the four filters that I put on top of every new thing I look at. And just not that many companies fall out the bottom of that funnel. And that first one, a business that can grow through a recession, you know, that gives you a lot of comfort, even in a COVID environment, that you're invested in these quality types of businesses or situations. And yeah, I mean, just like what we're seeing in large cap, a lot of them are tech centric, but that you're in these situations that can do well. not only do well, they have a balance sheet to acquire a competitor or whatever the case may be. And so that's kind of how I look at what I'm looking for, you know, in the micrograds I invest in. So it would be obvious, I think, to a lot of people to say, why are investors not taking

positions for small dollars and trying to take these companies private, right? They're so small, they're already somewhat illiquid. Is there a business in doing that? Have people tried that before? Has it not worked? Have you thought about it? Just talk to me about kind of this idea of you've got a small cap stock that wouldn't require nearly as much capital as let's say a very large cap stock and kind of bringing them back into the private markets. You definitely see that. I've probably been contacted a dozen times over the last three years from private equity firms that manage, you know, 10 billion plus that want to do exactly that, you know, just like everything else.

It's a lot harder than it looks, but you're seeing that. Let me give you an example. So microcapclub.com, which is basically a membership site, people just talk about what ideas they like and why. We have 600 companies, microcap companies that have been profiled by our members on there. And it kind of gets the discussion started and people talk about them and follow them. And, you know, some of them aren't active threads, you know, some of them kind of go away, but a lot of them are active.

You know, of those 600 companies since 2011 that have been profiled and discussed on Wicker Cap Club, I think we're up to 92 of those companies have been acquired. So 92 of the 600. So that's a decent percentage of that. And not all that's private equity. You know, some of that's just a private company buying a public company, you know, And you're starting to see that where you're seeing private company valuations get to a point where it's actually more prudent for them to buy a public small company in some of these cases. So we are seeing a lot of M&A activity, you know, start to heat up, especially in the last couple of years, I would say. Yeah. And I guess as you think about the micro cap space, you are one of kind of the most vocal people about it. You have said this deep seated belief. What would need to change in the market with companies, maybe structurally on the economy for you to basically throw your hands up and say, you know what, I had my run. This was great, but I'm going to go and focus on venture capital. I'm gonna go focus on, you know, large cap stocks or just do something else other than micro cap. Like what would kind of be that inflection point or that lever that you would just kind of throw your hands up and say, you know, it's not worth my time. It'd be worth doing something better with my capital and energy.

I don't think I could ever see myself doing that just because I'm not in 100 companies and I don't need to find 15 companies a year. You know, I'm in a dozen. And if I can find one or two good situations a year, that's all it takes. and I think it's become it has become more important for an investor to not be landlocked to their geography so you know you're not just focusing on U.S. microcaps you're also focusing on Canadian you're focusing on the U.K. you're focusing on Australian and I mentioned those three just because they're English speaking with similar accounting rules it's becoming more important that you become more of a worldwide investor and so I don't ever really see that

happening. I mean, it's pretty bad here in the U.S., but I still find, you know, a half a dozen ideas a year probably that fit those four filters I told you about that are really good situations. I love that answer. What is the process you go through in terms of when you mentioned talking to the management teams is a key piece for you. What are you looking for? What are the questions you're asking? And kind of how does that differ than maybe, again, a venture capitalist or a large cap investor if they got to sit down with the CEO? Like what is specific to the micro cap sector in those conversations with management or CEOs? I would say it's very similar to what VCs and private equity go through. I talk to Brent Beshore quite frequently about this.

And I would say it's very similar to the types of conversations. The only kind of differences from those types of conversations when they're private versus small companies when they're public is you do want to get a sense for how they feel about dilution, how they would raise capital if they had to. Because unlike those markets like private equity and venture capital, there's not a lot of good sources of capital for small public companies. A lot of the service providers that are in this arena, you know, they'll give you $2 million of capital, but they'll also dilute you 40%. And, and, you know, it'll just, it's such a, it'll be covenant, it's just a bad situation for a lot of small companies. But so a lot of the conversations I have with management is just

kind of seeing what their capital markets IQ is, and, and talking to them about that. So a lot of people want to know your thoughts on Bitcoin, cryptocurrency, and then also in the precious metal space with both the actual assets themselves and then gold miners. Maybe let's start with the gold and gold miners. How do you look at precious metals? Then how do you look at maybe some of the micro cap stocks that are related to those precious metals? In 2005, 2006, I was heavily invested in kind of junior exploration mining precious metals companies. And so there was a good two or three year period of time where I was solely focused on this arena. And, you know, I probably got a little bit lucky during that time period as well. But, you know, I still invest in

that area. And what I try to focus on are companies that actually have production of gold or precious metals, not just the ones that are exploring for them. You know, and so the ones that I'm investing today are they have actual gold mines they're they're operating and what you find over time is some of the biggest discoveries that have happened you know don't actually come from exploration companies they come from people that are already mining that are drilling out that are you know they're getting they're getting deeper deeper underground in the mine and they're just stumbling upon you know the next million ounces it's not coming from somebody drilling 50 a 50 grid pattern holes through surface you know in a small microcap company so i'm i mainly focus

on producers because i think historically they have found the biggest kind of paydays on on new resources and i also try to find those that have an operator running the business that have had a history of success that looks at mining and their business like a business not just a promote or a stock to get up and raise more capital. So I'm really looking for business operators that look at their, you know, mining as a real business, not as somebody just running a promote for a stock. Yeah. And I guess, how do you kind of pull that out, right? Like, what are the signals that you're looking for that can kind of highlight that? Because I think when you say it, like, it makes sense, right? Obviously, doing it is much harder. So kind of what's the process like, or what are

you exactly looking for there? You know, just like everything else, it just takes a lot of work to get to know the founder and the CEO of the company to see who they really are. And it's just like any relationship, whether it's with your wife or, you know, or whatever, you know, it's hard to build that trust overnight, just in a conversation or two, you know, and so a lot of my time is spent having conversations with a lot of CEOs to see who they truly are, you know, and I've been lucky enough with a few in the mining area that had previous successes. They, you know, had took companies from very small to larger and just got to know them well. And I continue to make those bets on those same individuals, but it just takes a lot of work to just kind of try to see who

somebody really is. I mean, a lot of it's just kind of common sense in a lot of ways. You know, I'm looking at somebody that's constantly telling me about the business, not constantly telling me about the stock. And is it common for a micro cap CEO to do two, three, four different kind of endeavors throughout their career, or do you see most of these CEOs staying with one business for, you know, a decade or two? You know, you see kind of serial entrepreneurs in micro-cap from time to time. A lot of times what you also see is somebody that started their micro-cap, you know, in the 1980s, and they're still running it today, and they shouldn't be, you know? So just because they've been around for a long time doesn't mean they should still

be there and it's probably a good spot for activism to take place um you know but primarily you you know i do like to try to find people that have previous success i'm not drawn to i'm not drawn to people that have big company success you know it doesn't impress me if they were the president at ibm because you know it doesn't really help you when you run a small company on a shoestring budget you know i'm going to see entrepreneurial success yeah that makes sense um and then bitcoin and cryptocurrencies have you done any work there kind of what are your thoughts in general um about that entire space i know very little about it to be honest with you and i'm not ashamed to admit that but you know i kind of view it like i do

gold and silver that has a slice of my portfolio you know to where it probably it probably does make sense to devote some you know some fraction of your portfolio to something like this you know but you would be much more better to talk to about this than me. I'm a big fan of not opening my mouth when I know what I'm going to say is going to make people dumber. But I do find it interesting, right? Because one of the things that just talking to you is very obvious is like the things that you're looking at are innovative in nature, because anytime that you've got something that is small in value today, and you hope will grow to be much larger value in the future, there has to be some level of innovation, right? And

people will debate you know what's more innovative than not and kind of what's sustainable what's not but at the end of the day like that's what you're really looking for you're looking for who can go into a market and capture market share and drive financials uh and i think that crypto is very similar now it probably has a much more binary bet to it right or kind of outcome where it's either gonna all be really really valuable and that's gonna be you know kind of the the um product of these like promises it's gonna be as big as the internet and you know that type of uh, perspective, or it's going to kind of be, you know, uh, kind of clean tech space in the mid two thousands, right. Where like they had a bunch of excitement and then it kind of didn't

really produce anything and people lost money. And so to me, it's like, has a lot of the ingredients of the companies that you look at, but has a much more binary outcome. Like I'm not sure how many micro caps go to zero every year. I'm sure there's some, but probably not nearly as many as you know the alt coins at the bottom you know 2000 that are all likely to go to zero for example yeah i mean probably maybe the better it probably is somewhat like microcap it's probably more so like venture capital you know maybe in that in that to those extremes you know where 60 of the companies go to zero you know i'm not sure what it is but i think i think you're right i think it's probably very similar there might even be i don't know how many how much crypto

is out there now but if there's you know 500 a thousand more than that but probably the numbers are probably even similar um and it just it's probably the same due diligence process too tom shaughnessy has been beating me over the head about crypto and bitcoin for so many years and i was like tom leave me alone one of these days i'm just gonna have to fine fine you know i gotta educate myself a little bit more on this i get on a podcast like this and not sound like an idiot but uh but i think you're right don't don't let tom get in your ear man he'll get you i love it uh when i ask people for questions one of the most popular questions was just like what was the uh best investment and what was the worst investment you've ever made

so maybe kind of give us some details there in terms of uh kind of both the process and then the outcomes on best and worst investment sure um one that since we were talking about precious metals one of one of the big winners i have was a was a company uh called gold resource corporation still trade today and they went public in 2006 and an ipo at a dollar you know so a dollar per share right 25 million market cap company and this is 2006 and they owned some property down in mexico they wanted to develop into a mine and they just approached the business completely i may say just asked backwards from everybody else in mining they said we're not going to sit here and waste 10 years and 200 million dollars drilling out a resource we know this resource is there we're

going to drill out you know enough to make a production decision and we're going to get this thing into production in five years and the industry just kind of laughed at them they're like okay whatever you know because it usually takes 20 years to get something into production and so they long story short they pulled it off you know by 2010 so 2006 2010 they actually got into production and their goal from the very beginning their story you know they went and told the story from when they IPO'd was we're going to do this by this date you know everybody said yeah right and by the way we're going to be a low-cost producer our average cost is you know $300 an ounce let's say on our on our goal that we produce and how we're going to spend that cash

flows a third to taxes a third to exploration a third is a dividend and if we get our production up to this rate we think we can pay a dollar per share dividend and everybody's like yeah whatever you know uh yeah sure well they made into production by 2010 and i think it was by 2011 2012 they hit a dollar per share in a dividend you know and that stock ultimately went from a dollar to 30 you know in about five years and they paid a massive dividend and i sold too early you And I think I sold out around 9, 10, something like that. And it still kicked me because I remember when they paid that dollar dividend, I'm like, I could have just got this dividend and just, you know, went on an island or something,

you know. But it was an incredible story. And then they had their ups and downs because the precious metals industry kind of had its ups and downs. But they're still around today. But that was a very fascinating story. And I just loved it because they approached the industry completely different. They were kind of mavericks in that regard.

And they pulled it off. so it goes back to uh doing something different than everybody else if you're right usually ends up leading to incredible value creation if you end up being wrong though you're just the idiot in the room right yeah exactly yeah what's the outcome is an important part exactly and on the on the bad side um i think it was the investment i made right after that and i don't know if you tend to if you see this in your career anthony but a lot of times the worst decisions you make is right after a big win because you're in a gunslinging mood you're like oh yeah i'll throw money at this or that and the other thing and that was kind of one of these situations so i ended up

investing in a company right after that that um again long story short it ultimately was a fraud like they were cooking the books and it was a company that had good fundamentals actually had good financials but i never quite understood why somebody would actually buy the product you know but the numbers were going up into the right every quarter you know they were reporting and it ultimately, I woke up one morning, the stock was halted. The auditor couldn't find the cash that the company supposedly said they had.

It opened back up 50% lower. I sold then, you know, and then it ultimately went down to zero in about two months. And that was one of the biggest losses I took. And, you know, I learned a couple of valuable lessons there, you know, mainly from not investing in companies that have products or services

that you don't completely believe in. Yeah. What other lessons did you learn from something like that? Because I think when people lose money, that's actually when they learn the most. So obvious in terms of what you just said, but what other lessons do you think you took away from it? I think one of the other lessons, believe it or not, this might not be what you're looking for, but is that you're not going to be right all the time in this business. And you hear that a lot, you know, but especially I find that a lot of people actually hurt their returns by trying to be perfect by trying to find the perfect situation. But oftentimes the best opportunities

are the situations that aren't perfect yet. And so you're trying to find these things that aren't squeaky clean quite yet. You're betting that they will be. And so one of the lessons was trying not to let that situation like that completely take away my courage to make another investment in something that's not perfect. So I continue to make choices, make investments into things where I know in the 12 companies that I hold, I'm going to be wrong when probably five or six of these. And so a lot of my time and attention is spent on the ones that I could be wrong on. Where am I going to be wrong on these? The winners are kind of easy. They execute, they put up the numbers, their stocks go up. But compounding money is about time, interest,

and time, you know, just being in these things for a long time. But the other side of that is make sure you don't lose money. You know, so I'm going to keep my losses small, let my winners run kind of old Bill O'Neill quote. And how do you think about selling positions, right? So you've got a concentrated portfolio, you have to have high conviction when you put these positions on, what are the things you've learned over time, or maybe some processes you have in terms of being confident enough to say, look, I was wrong, or something changed, and I'm going to go ahead and cut this position, but what does that look like for you? You know, usually, you know, so I have a system set up with every one of my investments where, you know, each one of these companies,

and this is probably where it's changed to where I told you I was in three or four companies when I was kind of building capital and I was on top of those companies. And what I realized just through maturing as an investor is I don't need to have my hands on top of all the variables in that company, there's probably three or four main ones that I need to be attuned to that matter for the long run. And so for each one of the companies I'm invested in, I know what those two or three variables are. And then I just put in safety nets everywhere to try to pick up on clues that the story might be changing. It might be just using Google with keywords, or it might be just tracking the conversations that I have with management, not that they're

telling me anything that they shouldn't, but just the tone difference in a conversation. It's amazing just how you can just spot a tone difference in the conversation with a CEO that you've talked to a hundred times before. And you're like, you know, something's wrong here. It's not that he told me anything, just that I can tell the enthusiasm has changed. And I would say 50% of the stocks that I sold, you know, were just because of some, when there's soft cues like that, you know, and that's why it's hard to do this business and do, or do what I do and how invest how I do without having that kind of relationship not with management but just kind of just having that communication line you know so you so you can have that so you can see that

and again not like they're telling you anything it's just you get to know somebody and you can tell when something's different and in all the times when I spotted or thought that something changed and I didn't sell I should have sold you know like every time and so usually when you start rationalizing owning a position is when you should sell immediately that's a that's a pretty good piece of advice talk to me a little bit about microcapclub.com and then intelligent fanatics capital management like what are you guys doing with capital management side and then in terms of microcapclub.com sure so i became a full-time private investor in 2000 late 2008 and 2009 and i had my own blog at that point time where i was talking about the handful of ideas

that I liked. And quite honestly, it was just getting too much attention. I was in these small liquid equities. Every time I posted on something, it would shoot the stock up, which is great for your ego, but it's just not a good long-term business thing to have. The powers that be don't like that type of manipulation, if you want to call it that. And I just said, I don't like this. Let's shut it down. So I shut down my blog. But I really enjoyed talking about ideas, seeing what other people liked. And I saw what Value Investors Club was doing and a couple other websites we're doing. And I said, why don't we just combine that and create a private community of like-minded, experienced micro-cap investors that is

shielded from the public, that's private, where we can kind of just talk about what we like and why. And so launched that site in 2011. And I thought, hey, if nobody else joins this thing, it'll just be my own personal diary, you know, whatever. It'll still be a good tool or resource for me. And it was. It was mainly probably just me talking to myself for the first year. But over time, we attracted people into it. And, you know, we have about 250 members now from across the world, about 40% from outside North America. And, you know, we're talking about stock or microcaps in not only the US, but Canada, Australia, the UK, kind of expanding out a little bit more and more every year. and it's just a great resource for finding ideas it's not this it's not a website so you can become a member it's free all you have to do is submit your favorite microcap idea two-page investment thesis the membership votes on the quality level of that investment thesis every month

if you get enough votes you get in if you don't you don't so we average 10 or 15 people that apply a month you know maybe three or four get in and that's just how it's been and then we're constantly pruning out members that don't participate. So we're always around this 200 to 250, but it's a very core group of folks and it's a very active group. And then we also have the ability, if you don't have the time or the ability to actually produce an idea, you can just subscribe for 500 bucks a year and get view-only access of these conversations that we're having. But where it's a little bit different is, you know, this is not a guru service. This is not, oh, come look at Ian. He turned 10,000 to 7 million. Look at me. You know, it's not that at all. It's mainly, you know,

you want to see what a bunch of smart people in this space are looking at and why that's why, you know, you join a site like this as a subscriber. I love the idea of applying and having to meet a certain quality threshold voted on by the members, right? I mean, like there's no better kind of, you know, insurance that, Hey, the people who are joining this are going to be the people we want here and also kind of fit the quality that we need to keep this value. Yeah. Yeah. And a lot of times,

The cool thing about micro cap is everybody's different. You know, we have a lot of young investors and, you know, a lot of, because these are small companies, you know, they're mainly found by retail. You know, I say there's like a, there's kind of a maturation of, of the investor base and an evolving company. It's like small retail, small institution, large institution and dumb retail at the end. And so we have a lot of younger investors and, you know, I, you know,

a lot of people, they, they might apply and they're a $200 billion fund manager and other person might have $5,000 to their name, you know, and we don't care as long as you're smart and you find good things and you post good content, you know, this is a place for you to be a member. Yeah. I love that. And then on the capital management side. Yeah. So, you know, I can't, I can't say I'm a full-time private investor anymore, you know, per se at that definition, but, you know, basically I've always said no to managing other people's money for a lot of years, mainly because of that experience I had working for that

financial advisor during the dot-com crash i didn't feel like dealing with other people you know you just say no year after year and you say no just because you've always said no and then you finally you finally meet the right people that you said okay you know maybe this person can invest alongside me you know and um you don't know if it's just because i'm getting into my upper 30s now you know but you know maybe there's more to life than me sitting in my corner office for the next 20 years by myself you know maybe i can help some other people you know get access to this amazing ecosystem and so that's where i kind of sat down and talked to my wife about it and we decided that it was a good time to you know see if we could do this kind of form a capital management

firm and give people access to the smaller half of the microcap ecosystem which there's very few intelligent ways to do that you know you can buy the russell microcap index but the average market cap is a small cap you know and they own 1400 names you know the worst the worst way to own microcap is to own all of them you know this is a stock picker's market you know so uh but the downside of this is it's capacity constrained. You know, like what I'm doing will never be a $200 million fund because there's just only, you know, especially if I own a dozen companies that are averaging 50 million market cap, it just doesn't work. So, you know, so we have this capital management firm where I manage, I don't know, maybe 30 or 40 other families, you know,

alongside my capital, you know, but I'm not really bringing any new capital because it's a capacity constrained thing that I do. And I'd rather just grow their net worth with mine rather than just try to raise as much money as I can. Yeah. And what's interesting to me is because of that capacity constraint, I'm assuming that there's families or, you know, LPs that you have where they would love to give you more money, but you probably can't take as much either. Like you're actually taking a smaller piece of somebody's net worth just because you have that capacity constraint, right? Yeah. I mean, in fact, when I launched it, I actually had a maximum investment people could do, which nobody does that, you know? So it was just like, it was a hundred thousand

minimum, 200,000 maximum. And they're like, well, what if I want to give you a million? I'm like, no, you know, sorry. You know, and a lot of that was due to, you know, some of the people that are investing with me, I didn't know them very long, you know, and so it was a way to protect the other investors. You know, the first thing I do in this, when I talk to investors, just try to scare the crap out of them. Like, this is volatile. You know, if the market's down 40, I'm going to be down 50. You know, can you handle that? And if you can't, this isn't for you. And let them self-select back in, you know, be like, you know, if they call me back and be like, no, I want to hear more about this. You know, I know I found the right investor. And so it's been a lot of time just

trying to find the right investors to invest alongside me, because I don't want to go through a COVID-19 February and March and people calling up complaining about their stock portfolio being down. And that's the time when you should be, you know, adding to something. And, you know, because we had the right investors, that's what that's what occurred. I was gonna say, what was the situation like in February, March this year? It was, it was actually really good. I was, I was very pleased. I mean, probably a quarter of the people called up and said, all right, I'm ready to put more, you know, I didn't have to initiate anything either.

You know, so it was, we have a good core group of folks and, you know, it's just like in any asset management business. I mean, the investors themselves should always outperform the average because they should be buying when it's opportunistic to buy an ad. You know, and that's what I try to tell people out of the gate as well. i love that before we wrap up uh i always ask the same two questions to everybody uh the first one is what is the most important book that you've ever read um i would say maybe there's a couple of them the first is is the bible you know and whether you

believe in in jesus or not i think it's just a great book on how to live a fulfilled life and a Great Life. And obviously, they talk about money and finances quite a bit, I think over 800 times. But I think it's just a great book for anybody to pick up and read and gain some valuable lessons. The second book was Think and Grow Rich by Napoleon Hill. It was a book I read when I was 16 years old that kind of got me on the path that I'm on today. You know, when I was 16, I thought I was going to be kind of stuck managing my family's business at the time, which was not my passion in life. And it kind of gave me the courage to do something else. And so I talk about that book. And maybe a quick third book that probably people haven't read is a book called

Free Capital by Guy Thomas. And it's a story of 12 private full-time investors who took their net worth from zero up to millions. And the reason why this book impacted me is I read it a few years after I became a full-time private investor and it occurred to me, you know, there's so few books written about full-time private investing. I mean, we read books quite honestly all the time about, you know, people that build up huge amount of wealth, you know, using the float of others, you know, basically fund managers or asset managers. But I believe honestly that being a full-time private investor is probably the pinnacle of financial achievement because you don't need anybody you don't need clients you need customers you don't you can just do what

you do and i think that's an amazing thing to be able to achieve and there's very few people um that i mean i can say very few but there's very few books devoted to it because these types of full-time private investors that are even talked about in this book they're private you know they're they don't want people to know who they are you know one of my one of my mentors when I, probably in the mid-2000s, I met him. He was a gentleman that he worked a regular job and he took his $200,000 401k in 1990 and he's a micro-cap investor.

And I don't know, two years ago, it's probably worth 75 million, you know, from 200,000. And it's strictly in a concentrated micro-cap, but you'd never know it. You know, he still lives in a $400,000 house, still lives where he still works the same job because he loves his job you know and it's important to him when you talk to him he's just like my worst nightmare is people you know my friends my family actually know what I'm worth

you know they'll start looking at me differently you know they they'll start looking at me for what I have not the relationships that we have and so it's important that anonymity is important to him and not only that I think a lot of private full-time investors they found a niche that they can exploit for a long time there's no reason to arm wave and bring people to it and so those two are kind of combination why kind of full-time private investing is sort of like this little thing that people talk about but nobody wants to really talk about you know unless it's anonymously and so this book you know talks about 12 of these people and some of them are anonymous some of them aren't and the other thing I liked about this book is not everybody's investing the same way

there's commodities traders there's short-term traders there's investors there's people doing different things. And I think that's a valuable lesson for everybody, you know, listening to this, you know, there's a lot of ways to get wealthy in this world. You know, you don't need to invest like Buffett. You don't need to invest like Anthony or me. You know, you can find your own path that, that really connects with who you are. And then that's when you just crush it, focus on it. I love that story. It is the epitome, I think, of freedom too, right? Like you said, so that's awesome. Second question is a little bit more fun one, and then you're going to get to ask me a question to end it but uh aliens believer or non-believer

i don't know i i never even thought about that one before you've never thought about it well i've thought about it but i've never thought about it deep enough to uh so i had a guy come on the podcast once uh his name is bruce fenton and he said every human asks the same two questions at some point in their life one what happens after we die and two are we here alone or not and so this really gets at kind of that second one which is um you know is there other life uh whether intelligent or not you know elsewhere in in the galaxy right right it's hard to believe that there isn't how you know big the the galaxy is i mean i but yeah i mean it's it's hard but what type of life form that is who knows you know

there's more and more ufo uh videos that are coming out from the airports that are being dropped by saying that they exist you know so it's so uh you get to ask me one question to uh to finish this up what's the one question you have for me uh what do you want to be doing in five years uh that's an easy one doing the exact same thing i'm doing now i'm having a blast um i always joke and i say uh people will ask me like you know how do you do all this stuff whatever and i say it's because it's fun for me right and there will be a day and i get the sense that you're probably similar to me where like i just wake up and i'm like okay this isn't fun like it's over i'm not writing anymore i'm not recording videos i'm not talking about crypto like just it's over uh and i

want to go do something else and um i don't really know why that would happen or when that will happen but you just get this sense of like you could do something for 5 10 20 maybe 30 years and then one day you just say hey i want to go do something else uh but until that day comes i i just don't see myself doing anything else because i genuinely enjoy it right what what's your north start with kind of everything that you do what's the thing that really just kind of drives you the most just learning i mean i i joke all the time people who listen to podcasts have heard me talk about a bunch but uh this is like the most selfish thing i do right and selfish because i get to talk to a bunch of smart people who educate me on stuff right so you just gave me a master class on

microcap stocks and i could have went and read online for you know hours but i probably learned more just now than i would have doing that and so um i think people genuinely appreciate the fact that like i record the conversations i put them out i'll write about them and kind of you know create a bunch of content around it but ultimately like i'm learning right and so once you kind of have a bunch of this it helps inform my own investment decision making right so whether it's venture capital it's you know more than crypto stuff um it just you're you're getting so many smart people telling you so much stuff that yeah sure you throw some of it out but there's a lot that sticks too right and you also are able to do pattern recognition which to me

when you go to that kind of north star of learning that's actually probably what you learn the most right is like whether you talk to a micro cap investor a large cap investor venture capitalist whatever like hey the team matters okay like like you know pretty elementary level type thing but getting that reinforced by people who invest in all different aspects of financial market I think just kind of you know hammers at home and so I do look at almost like an advantage right that uh that i get kind of a diversity of um of people and experiences um that i get to just ingest every day so thank you yeah no no i mean i think you do an amazing job and i think the way you do it is really good because i kind of think um in one way you you crush it in a

lot of ways but one way that i think it's kind of similar to what you and i do is you know a lot of people at least historically probably have looked at bitcoin and crypto and at least the traditional financial folks be like oh you know that guy or they're doing that it's the same way people look at micro cap or penny stocks and you try to bring credibility to what you're doing by you know first and foremost just being intelligent what you say and the people you bring on your podcast and things like that and it just brings you know credibility to everything that you do but credibility to you know whether it's crypto or bitcoin or micro cap you know these are these are asset classes that should have um more people looking at them in an intelligent manner you know

So I think what you're doing is amazing. And look, there's a balance, right? Like I always joke with people. I say like, hey, I want everyone to know about Bitcoin and understand it. But at the same time, like maybe just wait a couple of years before you guys all get smart on it, right? Because that's the opportunity. Same thing with micro-cap, right?

As if every investor in the world was looking at micro-cap, actually, that would be a bad thing for you, right? It'd be a much more efficient market. Well, and it's unfortunate that the same rules apply too. Like right now, micro-cap is probably hitting its peak on awareness just because there's a lot of small cap micro cap momentum plays whether covid plays whether they're uh whatever it is that are just making really stupid you know going up 500 a thousand percent in a few days to a few weeks you know and so you get more attention when things are rising um and you same thing

probably happened with what in your world you know a couple years ago it'll happen again it's unfortunate that more more people will look at it you know at the probably the wrong time but you know whatever you know overall everything's going to go ebb and flow absolutely where can we send people to uh to learn more about you and uh microcap uh club or other things you want them to go check out um you can find me on twitter my handle is my name ian castle you can go to microcapclub.com um that's a good good resource for microcaps awesome man well listen thank you so much for taking the time to do this like like i said uh you know i learned a lot today i hope everyone else did. And we'll have to do this again in the future. Thanks. Bang, bang.