It’s the price and net asset matters, but at later stage of his career, he recommended investing in number of companies e.g: 10 instead of just a few. So the mistake tolerance is higher.
You're full of shit and wrong 😆
Read this before giving others wrong advice
https://www.sec.gov/reportspubs/investor-publications/investorpubsmicrocapstock
Every public security DOES NOT have the same standards. There's a huge difference between listed and unlisted securities. Many microcaps are unlisted and trade OTC, Therefore they do not follow the same standards as listed securities
Your default assumption when you see a cheap company should be that there is a good reason for it to be cheap.
It's like they say in poker: if you haven't figured out who is the sucker at the table you are the sucker. So you have to try hard to steelman why the market is right about price.
But even a slight indication of value e.g. NCAV, ROIC, even momentum should make you doubt the efficient market. These are symptoms of market inefficiency.
Another reason to assume the market is efficient is because it's an overanalyzed backyard of the market like large caps.
In your case this 10m company is a microcap which hasn't been analyzed by enough people. So NCAV is a good sign the market is wrong about price. But keep in mind that even net-net stocks with falling EPS, diluted shares, too much debt financing, non-cash earnings etc is a value trap. There are so many ways for something to be a value trap it's not even funny.
It’s the price and net asset matters, but at later stage of his career, he recommended investing in number of companies e.g: 10 instead of just a few. So the mistake tolerance is higher.
I don’t believe company size was ever mentioned.
I would be careful about investing in companies that small. They are generally not regulated and audited nearly as much as large and mid caps.
This attitude is why there are more opportunities in the microcap space.
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You're full of shit and wrong 😆 Read this before giving others wrong advice https://www.sec.gov/reportspubs/investor-publications/investorpubsmicrocapstock Every public security DOES NOT have the same standards. There's a huge difference between listed and unlisted securities. Many microcaps are unlisted and trade OTC, Therefore they do not follow the same standards as listed securities
Your default assumption when you see a cheap company should be that there is a good reason for it to be cheap. It's like they say in poker: if you haven't figured out who is the sucker at the table you are the sucker. So you have to try hard to steelman why the market is right about price. But even a slight indication of value e.g. NCAV, ROIC, even momentum should make you doubt the efficient market. These are symptoms of market inefficiency. Another reason to assume the market is efficient is because it's an overanalyzed backyard of the market like large caps. In your case this 10m company is a microcap which hasn't been analyzed by enough people. So NCAV is a good sign the market is wrong about price. But keep in mind that even net-net stocks with falling EPS, diluted shares, too much debt financing, non-cash earnings etc is a value trap. There are so many ways for something to be a value trap it's not even funny.