Ian Cassel has been picking microcaps for twenty years, and his argument in his new book, Stock Picker, is that the edge everyone assumes has been arbitraged away is actually coming back. Not the spreadsheet edge. The one that comes from getting on a plane, spending a full day with a CEO instead of an hour, and learning to sense when something is wrong before the numbers say so. His line is that with AI write-ups everywhere, the only place left to get an edge is the conversations that are not recorded, transcribed or scraped, and that puts the game back where it was 30 years ago.
The other half of the book is less comfortable and, for me, the reason it hit. Ian opens with his mother's death and keeps going: living off your own capital, the maturation of an investor running alongside the maturation of a person, what it costs to be the one who gets the credit and the blame. We get into why most microcaps deserve to be rented rather than owned, the junior miner curve and the 36 month rule, how he decides which company visit is worth the flight, scarcity as a reason a stock reprices, why capital allocation barely appears in a 300 page book about picking stocks, and the losing-streak instinct that kills concentrated managers: doubling down instead of diversifying. I push back on whether the microcap universe he describes still exists in the US. Fair warning, I loved this book and it shows.
This podcast is sponsored by my upcoming webinar with AlphaSense
AI is evolving rapidly. Join the team from AlphaSense, Stephen Clapham from Behind the Balance Sheet, and myself as we discuss the burgeoning use cases and evolution of AI in general and AI agents in particular. Sign up here.
Please follow the podcast on Spotify, iTunes, or YouTube! And please be sure to rate / review the podcast if you enjoy it, or share it with someone else who would enjoy it (more listeners is a critical part of the flywheel that keeps this Substack and podcast going!).
Transcript for paid subs begins below (The initial transcript is AI-generated and is replaced with a professionally edited version when available)
Disclaimer: Nothing on this podcast or on this blog is investing or financial advice; please see our full disclaimer here. The transcript below is from a third party transcription service; it’s entirely possible there are some errors in the transcript.