Learn from the gurus.

Better be wise by the misfortunes of others than by your own.
Aesop

He who is not courageous enough to take risks will accomplish nothing in life.
Muhammad Ali

My goal is not to fail fast. My goal is to succeed over the long term.
Marc Andreessen

Knowing yourself is the beginning of all wisdom.
Aristotle

Never let knowledge stand in the way of truth.
Ajahn Brahm

We just focus on a few outstanding companies.
Warren Buffett

What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact.
Warren Buffett

It’s not enough that we do our best; sometimes we have to do what’s required.
Sir Winston Churchill

Select Articles

Compiled by the experts at Sophic Capital

Macro Risks To The Stock Market Are Mounting by Jesse Felder

April 7, 2021 – Part of the runup in stock prices over the past year is due to the rebound in earnings we will see over the next few quarters. However, now that interest rates, oil prices and the dollar index have each been rising for some time, earnings growth will almost certainly peak and rollover next year, falling back into negative territory. As the stock market discounts fundamentals roughly 18 months into the future, according to Stan Druckenmiller, this bearish reversal in fundamentals could begin to affect stock prices relatively soon. Read More

The Exponential Ride by John Maudlin

April 2, 2021 – The last year brought exponential growth in, among other things, use of the word “exponential.” It is now the go-to term when you want to say something is “growing super-fast.” As humans, we tend to think in terms of linear growth—whatever is happening immediately around us in shorter time periods. Accelerating, exponential growth is harder to grasp. Exponential growth means the rate of growth increases with time, just like a car goes faster the more you press the gas pedal. Read More

Why It May Be Time To Take A More Traditional Approach To Value Investing by Jesse Felder

March 31, 2021 – Just about a year ago, I noted here that corporate insiders were betting heavily on a reversal in the relative downtrend in value versus growth. At the time, executives at companies outside of the most popular sectors in the market were buying shares of their own stock in the open market in size. Since then, value has staged a dramatic comeback. In fact, this quarter marks the greatest period of outperformance for value over growth in two decades. Furthermore, rising interest rates would appear to suggest this trend still has room to run. Read More

The Transcript: Weekly Quotes from Earnings Calls by Avondale Asset Management

March 29, 2021 – Confidence is high in the US thanks to strong vaccination rates. What will the new normal look like though? Offices could re-open by summer, but how much will we continue to work from home? And how much will we travel for business? Supply chains are still bottlenecked, leading to inflation pressure. The blockage of the Suez Canal won’t help that. Read More

The 1970s Never Ended by John Maudlin

March 26, 2021 – Big economic storms are rare and usually end quickly, but they tend to have long-lasting effects. Today I want to talk about a storm 50 years ago that still affects us now. Read More

The Investors Roundtable #35: Identifying Great Companies Early by Robert Kraft

March 26, 2021 –This episode of The Investors Roundtable (#35) is inspired by one of my favorite investing books of all time, The Intelligent Fanatics (all three books in the series), which is about how great leaders build sustainable businesses. Our panelists all have years and years of investing experience focused on identifying great companies early, and today, they share their knowledge on how they’ve gone about doing so. P Read More

Gold Goes Out Of Style by Jesse Felder

March 24, 2021 – Last summer I suggested that the fireworks show underway in the gold price at the time wouldn’t last forever and that a “a more tactical and discerning approach” might be warranted due to the increasing popularity of the precious metal. Since then, gold has fallen about $250 (13%) and sentiment has shifted significantly once again. Inflows into gold ETFs have turned to outflows and it is becoming common to question gold’s utility in an overall asset allocation model. Read More

The Transcript: Weekly Quotes from Earnings Calls by Avondale Asset Management 

March 22, 2021 – It’s hard to remember that there’s still a pandemic going on. Vaccination rates have increased and it looks like we may be on the cusp of a roaring 20s. Consumers are healthy and eager to make up for lost time–booking travel and eating out. Offices will probably re-open by the end of summer but working from home is likely to remain an option. Read More

Broken Debt by John Maudlin

March 19, 2021 – Modern technology is amazing but our ancient forebears built some wondrous things, too. Long-ago historians organized them into “Seven Wonders of the Ancient World.” (Of course, their “world” was the Mediterranean and Middle East. Other wonders existed elsewhere.) Last week I noted how some call compound interest the Eighth Wonder of the World. Is it really on par with the Colossus of Rhodes? Maybe. Read More

Inflation Is Broken by John Maudlin

March 12, 2021 – I have been writing for many years that the US in particular and the Western “developed” world in general were approaching a time where none of our choices would be good. We have arrived. Any choice the government and central banks of the US and the rest of the world make will ultimately lead to a crisis. Just as the choices that Greenspan and Bernanke made about monetary policy created the Great Recession, Yellen and Powell’s choices will eventually lead us to the next crisis and ultimately to what I call The Great Reset.  Read More

The Transcript: Weekly Quotes from Earnings Calls by Avondale Asset Management 

March 8, 2021 – As vaccines continue to be administered the end of the pandemic appears to be at hand. People are resuming normal lives and pent up demand is being unleashed. Consumers are looking forward to a summer filled with travel and congregation with family and friends. Even the Fed is noticing the brighter outlook. The world is opening back up but it probably won’t ever be the same as it was before the Pandemic. Read More

Everything Is Broken by John Maudlin

March 5, 2021 – I was on a client call earlier this week with Steve Blumenthal. The gentleman is at that stage in life where he needs cash income and not risk. Steve commented, “The bond market is broken.” And indeed, the traditional fixed income bond market is broken, thanks to the Fed. We were able to suggest some alternatives (they are out there) that could help solve his problem. Read More

Micro Machin‪e‬ by Ian Cassel

Maarch 5, 2021 – In this episode Ian discusses how he became a microcap investor. One of his first successes was XM Satellite Radio. He discovered the company when it was a microcap trading for $2/sh and didn’t have any contracts with car manufacturers yet. Ian saw they were presenting at a conference in NY, got in a car, and met with the CEO. After that meeting Ian became obsessed with turning into a full time private investor. Read More

Dr. Copper Delivers A Diagnosis Of Inflation by Jesse Felder

March 3, 2021 – A little over a year ago, I shared a chart of the copper price writing, “A breakout above that [upper trend] line would suggest that inflation (even stagflation), after being written off as a relic of the past, could finally be making a comeback.” Well, the copper price broke down in an epic fakeout last year before reversing and breaking out, in convincing fashion, to the upside. Read More

The Great Jobs Reset by John Maudlin

February 26, 2021 -We are almost through February and (knocking on wood) the US COVID-19 situation is improving daily. The B117 and other variants haven’t yet made a big impact. Possibly they will, but as time passes more people are getting at least partial protection through vaccines. The “race” I’ve described seems to be going the way we hoped. Read More

Random Thoughts from the Frontline by John Maudlin

February 19, 2021 – Readers often ask how these letters appear so regularly. The answer is we have a process. Normally, I talk to my associate Patrick Watson on Monday about the next weekend’s letter. We both go into research mode, verbally outlining a letter, and by Thursday I have an outline and some background research. This gives me plenty of time to flesh it out, so to speak. Read More

Overstimulation Risk by John Maudlin

February 12, 2021 -Among the many strange, unforeseen changes of the last year is a new respect for Keynesian economic theory. Practically everyone in power now agrees that deficit spending produces GDP growth. They differ only on its expected magnitude and duration. The few exceptions are mostly outside the halls of power. Read More

The MicroCap Advantage by Ian Cassel

February 11, 2021 – I recently gave this presentation entitled “The MicroCap Advantage” to an investment group out of India hosted by Varinder Bansal, founder of Omkara Capital. We covered a wide variety of topics ranging from my story and research process to the structural advantage in microcap investing. I hope you enjoy it. Read More

Controlling the Curve by John Maudlin

February 5, 2021 -If time is money, then interest rates are the price of time. The most important interest rates in the world are for US Treasury securities. This is why I’ve long said it makes no sense for a committee to set those rates. The markets could do just fine without that help, thank you. But the Federal Reserve’s Open Market Committee arbitrarily decides the overnight Federal Funds rate. And lately, it doesn’t stop there. Read More

Getting Started in Life Science Investing with Dr. David Sable by Ian Cassel

February 2, 2021 – David Sable MD directs healthcare and life science investing for the Special Situations Funds and is portfolio manager of the Special Situations Life Sciences Fund. David gave this presentation on Life Science Investing at the MicroCap Leadership Summit (MLS) in 2020. Read More

Inflation and Broken Windows by John Maudlin

January 29, 2021 -I’m often asked if I foresee inflation or deflation. This week we had an “Ask Me Anything” session for Alpha Society members and it came up several times. Both are possible in their own ways, and frankly I feel a little funny telling people I think we will see both. I would just like to have a growing economy and dependable money that holds its value. Read More

Rule Breaker Investing by David Gardner by Ian Cassel

January 21, 2021 – David Gardner gave this presentation on Rule Breaker Investing at the MicroCap Leadership Summit (MLS) in 2020. David co-founded The Motley Fool with his brother Tom in 1993. The Motley Fool is a financial services company whose purpose is to help the world invest better by speaking the truth about Wall Street and empowering millions of people to take control of their financial lives. The Motley fool is a sizable operation with around 400 fools that help spread the company’s mission, and the company has been twice named Glassdoor’s #1 Best Medium sized Company to work for in America. Read More

With Poker and Investing, Know the Game Your Playing and Master Your Strategy with Annie Duke by Robert Kraft

January 20, 2021 – I’m very excited for this episode. As you see in the title, my guest today is Annie Duke. One of my earliest memories of watching sports, believe or not, was watching the 2003 and 2004 World Series of Poker. Seeing legends like Chris Moneymaker and Greg Raymer win the title, then all the tournaments in between, was so cool, and all I wanted to do was play poker. Another stand out amongst the greats playing these now televised events was, you guessed it, Annie Duke. Since retiring from the game in 2012, Annie is an author, corporate speaker, and consultant in the decision-making space. Annie’s latest book, How to Decide: Simple Tools for Making Better Choices, was released in the fall of 2020 from Portfolio, a Penguin Random House imprint. Her previous book, Thinking in Bets, is a national bestseller. As a former professional poker player, she has won more than $4 million in tournament poker. During her career, Annie won a World Series of Poker bracelet and is the only woman to have won the World Series of Poker Tournament of Champions and the NBC National Poker Heads-Up Championship. Prior to becoming a professional poker player, Annie was awarded a National Science Foundation Fellowship to study Cognitive Psychology at the University of Pennsylvania. Annie is the co-founder of The Alliance for Decision Education, a non-profit whose mission is to improve lives by empowering students through decision skills education. She is also a member of the National Board of After-School All-Stars and the Board of Directors of the Franklin Institute. In 2020, she joined the board of the Renew Democracy Initiative. Long story short, she’s incredible, and I’m still wrapping my head around what I learned from speaking with her. Read More

Always Be Thinking Ahead by Ian Cassel

January 15, 2021 – In 2020, many of us outperformed. But to be honest — 2020 was a year that made most of us look a lot smarter than we are. All you had to do was own some technology stocks, not sell them, and you were up 50%+. Apple (AAPL), the largest public company in the world, was up 80% in 2020. Amazon (AMZN), the second largest public company in the world, was up 76%. Tesla (TSLA) was up 740%. I communicated to my IFCM investors in my Q4 Letter, “We don’t want to downplay our accomplishments, but truth be told we aren’t sitting around hand slapping and grab-assing about the past. We are focused on the future and this is where we will spend the remainder of this letter.” Read More

Something of Value by Howard Marks

January 2021 – If asked about possible silver linings to this pandemic, I would list first the chance to spend more time with family. Our son Andrew and his wife and son moved in with Nancy and me in Los Angeles at the beginning of the pandemic, as they were renovating their house when Covid-19 hit, and we lived together for the next ten weeks. There’s nothing like getting to spend months at a time building relationships with grandchildren, something we were privileged to do in 2020. I’m sure the impact will literally last lifetimes. Read More

I Hope This Inspires You by Ian Cassel

September 10, 2020 – In 1997, on my 16th birthday, my parents sat me down and gave me a choice. They told me they had saved approximately $20,000 for my college education. They had also co-signed paperwork so that I could open an account with their financial advisor. I could choose what to do with the money. Read More

Recent Tweets

More videos to come from Brad Young our technical manager for @kontrolBioCloud. The response to the last video was great (well done Brad!).

#safespacetechnology #ontario

Nice acquisition opportunity announced this morning by ⁦@KrakenRobotics⁩
Looking to learn more about Pangeo?
This company helps clear WW II-era bombs off the sea floor to make way for wind farms | CBC News
$PNG $KRKNF $PNG.V https://www.cbc.ca/news/canada/newfoundland-labrador/pange-bombs-seafloor-1.5164626

Kraken enters into letter of intent to acquire subsea services company.

https://sophiccapital.com/investment-ideas/kraken-robotics-inc/?qmodStoryID=7034289461794530

$PNG.CA $KRKNF #microcaps

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More videos to come from Brad Young our technical manager for @kontrolBioCloud. The response to the last video was great (well done Brad!).

#safespacetechnology #ontario

Nice acquisition opportunity announced this morning by ⁦@KrakenRobotics⁩
Looking to learn more about Pangeo?
This company helps clear WW II-era bombs off the sea floor to make way for wind farms | CBC News
$PNG $KRKNF $PNG.V https://www.cbc.ca/news/canada/newfoundland-labrador/pange-bombs-seafloor-1.5164626

Kraken enters into letter of intent to acquire subsea services company.

https://sophiccapital.com/investment-ideas/kraken-robotics-inc/?qmodStoryID=7034289461794530

$PNG.CA $KRKNF #microcaps

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External Resources

The Transcript

Each week as we read dozens of transcripts from earnings calls and company presentations, Avondale Asset Management takes note of interesting and important quotes from management about the economy and industry trends.

The Felder Report

Take the financial road less traveled with Jesse Felder, who began his professional career at Bear, Stearns & Co. and later co-founded a multi-billion-dollar hedge fund firm headquartered in Santa Monica, California.

MicroCap Club

Founded in 2011, MicroCapClub was created to be a platform for experienced microcap investors to share and discuss microcap stock ideas trading on US and Canadian markets.

Memos from Howard Marks

Howard Marks, Director and Co-Chairman of Oaktree Capital Management, shares knowledge of the future of investing in these insightful memos.

Planet Microcap Podcast

The Planet Microcap Podcast offers education the next generation of investors in microcap stocks.

Connecting the Dots

John Mauldin helps individual investors and institutions develop a clearer understanding of the forces driving the global economy and investment markets.

The Weekly Profit

Robert Ross's free weekly newsletter where he reveals the most effective ways to make a fortune with safe dividend stocks.