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Welcome to the 294+ subscribers who have joined the Co/Investor Club Community in the month of February! We hope that you will find value in our weekly newsletters and for those of you who are Premium Members, we look forward to sharing more investment opportunities with you.
Top 50 Microcap Investors List: Kyle Cerminara
For this week’s Top 50 Microcap Investor we present Kyle Cerminara, Chief Executive Officer of Fundamental Global. Fundamental Global is a “private partnership focused on long-term strategic holdings co-founded by former T. Rowe Price, Point72 and Tiger Cub portfolio manager Kyle Cerminara and former Chairman and CEO of TD Ameritrade, Joe Moglia.”
Read our Feature on Kyle Cerminara
Each week we research and explore some of the best investors found in the smallest companies. We aim to distill the most consistent and important lessons each week from our featured investors. There is no order to this list.
Past Top 50 Microcap Investors/Enthusiasts Features:
> Adam Wilk > Sean Iddings > Thomas Bachrach
> Erik Moquist > Mathieu Martin > Maj Soueidan
> Brandon Chow > Chris Lahiji > Paul Andreola and Trevor Treweeke
> Artem Fokin > Sean Marconi > Ian Cassel
> Connor Haley > Peter Rabover > Chris Krug
> Christian Olesen > Neil Cataldi > Daniel Smoak
> Brian Bares > Matt Brackmann > Andrew Martin and Nick Peters
> Denver Smith > Joe Koster > Yaron Naymark
> Mike Schillinger > Joe Boskovich > Trey Henninger
> Harris Kupperman > Keith Smith > Chip Maloney
> Mark Vonderwell > Rod Maclver > Mitchell Scott
If you know someone who would be a good candidate for the top 50 list, please reach out to sam@avenelfinancial.com
Prediction is hard
“We have two classes of forecasters: Those who don't know—and those who don't know they don't know.” —John Kenneth Galbraith
It was an eventful week in the markets, and the world. As the conflict between Russia and Ukraine intensified this past week, the Dow Jones Industrial Average dropped over 800 points early on Thursday—and then finished the day in positive territory. And then rose by over 800 points on Friday.
As the saying goes: Prediction is hard, especially about the future.
There’s a reason why many of the great investors such as Warren Buffett and Peter Lynch have said that they pay little to no attention to macroeconomics. Instead, they focus on individual businesses and opportunities. Mr. Buffett likes to say that it’s important to separate what’s important from what’s knowable. The outcome of a major geopolitical event like we are experiencing today could be very important to markets and economies. But its evolution is difficult to predict. And it's even more difficult to predict how markets will react to that evolution.
These events do create volatility that can allow long-term investors the opportunity to buy pieces of business at discounted prices. It’s one of the advantages of the stock market for those that use fluctuations to their advantage. As Mr. Buffett wrote in his 2021 Annual Letter to Shareholders this weekend:
One advantage of our common-stock segment is that – on occasion – it becomes easy to buy pieces of wonderful businesses at wonderful prices. That shooting-fish-in-a-barrel experience is very rare in negotiated transactions and never occurs en masse.
The future is never clear. Either peace or further escalation in world events could cause stocks to go up—or down. The details of how things unfold will make the difference, and those details are hard or impossible to predict with clarity. Our advice: keep your watch list ready. Focus on the businesses you’d like to own a piece of and the price at which you’d like to own them. Pessimism has started to creep into certain areas of the market and, if it becomes widespread, more bargains may start to appear. To end on another quote from Mr. Buffett:
The most common cause of low prices is pessimism—sometimes pervasive, sometimes specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It’s optimism that is the enemy of the rational buyer.
Tweet of the Week
In Case You Missed It…
SNN Network Launches MicroCap Review Index MCRI(TM)
Warren Buffett’s Annual Letter to Berkshire Hathaway shareholders
Chris Bloomstran’s Annual Letter to clients of Semper Augustus: “Brown Sugar”
Masters in Business Podcast: Sebastian Mallaby on How Venture Capital Made Silicon Valley
The Business Brew Podcast: Simeon Siegel - Retail Therapy
The Investor's Podcast: Top 5 predictions for 2022 w/ Andrew Walker
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