GeoWire Monthly, Vol. 3, Issue No. 11, December 2023

Lately, we’ve had a lot of good reasons to advertise our favorable sentiment on microcap stocks, stressing that they are back. Several updates conveyed that the space continues to gain momentum as the small and microcap indexes outperformed their larger counterparts.

We think this theme is so important that, as part of this Monthly GeoWire, we are bringing to attention a late December communication we sent to free subscribers to our newsletter.

The crux of the update was inspired by Dominique Mielle’s book, Damsel in Distressed: My Life in the Golden Age of Hedge Funds, which put us in a frame of mind to use her concepts to convey that we are full speed ahead and plan to ride a multi-year microcap wave commensurate with stock investment idea generation.

An excerpt (versioned for this month’s copy) from an article published to GeoInvesting on December 25, 2023, Capitalizing On Inefficiencies: A Reflection On ‘Damsel In Distressed’ By Dominique Mielle, encapsulates why I am the most bullish on our microcap investing strategy since the onslaught of the 2008 Recession created a prolonged period of microcap bearishness.

“…

While large cap only investors and microcap haters have to contend with increasing competition in strategies that are finding success, microcap stock pickers have the luxury of searching for opportunities in a pool of around 10,000 stocks in North America (~50% of total stocks), while arguably, the competition has been declining or at least staying level.

It’s a dream set-up, especially if your strategy is value investing, or whatever you want to call buying undervalued stocks producing revenue and earnings, a style of investing that was not broadly in vogue for the past 15 years (also applies to high probability turnarounds).

But mark my words, it’s quietly coming back.

And it’s going to be back for several years and lead to massive expansions in valuation multiples. 

The 24% and 27% rallies we just witnessed in the small and microcap indexes, respectively, over the last 2 months is child’s play. The best is yet to come for these types of stocks.

Get used to seeing the big mover lists being occupied by more and more legit companies as opposed to MEME and pump and dump stocks.

…”

I’m proud to say that since the founding of GeoInvesting in 2007, our team has brought our premium subscribers over 200 multibaggers.

While 2022 made the investing landscape more challenging, the last two years have been a great time to reset strategy and get ready for the next bull market which will be led by quality microcap stocks, as well as high-probability microcap restructurings.

I’m betting my 30+ investing career on it. Our strategy to be hyper focused on quality is paying off, as evidenced by the performance of the 14 stocks we added to GeoInvesting’s Model Portfolios in 2023, with 6 of them achieving 40% returns or more, and only 4 in minimally negative territory (-0.67%, -4.09%, 5.25%, and -12.01%.)

So there you have it. Before we got into last month’s coverage and stats, I needed to once again get this off my chest and use my proverbial bullhorn, in case you didn’t hear me the first 4 times.