Whopper is a deep value investor, he blogs at http://www.whopperinvestments.com
You may ask why I’ve been away for so long. There are several reasons: laziness, busy with other projects, etc.
However, one of the big reasons is it’s pretty difficult to blog about microcap stocks you own or are considering owning. For example, one of the first stocks I blogged about was Abatix (ABIX) and Paradise (PARF). At the time, I had decided to pass on both, but I would have happily bought them if they had gotten a bit cheaper. Both stocks, however, ran up in the wake of my article and never got to the point where I could consider pulling the trigger. (Abatix in particular burns. It ran up over 100% and was cheap enough that it was as close to risk free as a stock gets).
Welcome to our latest issue of ValueWalk’s hedge fund update. Below subscribers can find an excerpt in text and the full issue in PDF format. Please send us your feedback! Featuring investors exit long-short hedge funds, the oil market is now "broken", and Haidar Capital surges 225%. Q2 2022 hedge fund letters, conferences and more
The other problem is when I post stocks I own, particularly the smallest and most illiquid ones, can run up an incredible amount in the wake of a post. For example, my first pick in the microcap magic (the April pick) ran up about 45% the day after it was published, and Meritage (MHGU) more than doubled after I published my research on it (btw- I can’t hold a position in the newsletter before publishing it anymore, so that is no longer a concern). Anyway, in both cases, the stocks were up substantially in the wake of my publishing. It would have been pretty easy to have set limit sell prices much higher than the prevailing price, then come back twenty or so days later and re pick up the shares at a lower price after the liquidity squeeze was over. Now, I didn’t do this, but it would have been pretty easy to do and pick up a quick profit.
So what’s the solution? I wish I knew! I don’t want to publish on large cap stocks, because I really don’t feel like there’s any value to be added there. At the same time, I don’t want to post my best microcap ideas, because I want to save those for myself in case those get cheaper or some of my other ideas free up and I have more cash to invest. And I can’t post crappy ideas, because then what’s the point of running the blog or taking the time to write posts???? It’s a difficult question to answer, but it’s still something for both me, as the author of the blog, and you, as the reader of microcap blogs, to keep in mind
Disclosure: Long MHGU
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