We Invest in a diversified portfolio of small cap stocks looking for 1000% re-rates.
Our typical hold period of +3 years is designed to compensate for market gyrations and allow companies to execute on their objectives and milestones.
While achieving these should have a positive impact on the share price, sometimes a key risk materialises and our “Big Bet” (the reason we originally Invested) fails.
Small cap investing is risky and for each successful investment there will be many companies that fail to deliver on their objectives.
Failed Investments are common in small cap investing, and it is important for us to be transparent about our plans around our unsuccessful Investments.
The ‘Bottom Drawer’ Portfolio generally represents stocks that we still hold, but have generally not made meaningful progress based on our original reasons for investing, and the share price is likely below our Initial Entry Price.
We still hold a position in these companies in the hopes that they may pull a “rabbit out of the hat” with a new acquisition or unexpected positive result.
We may also look to sell some or all of our position in these stocks over the next 6 months to free up capital for new Investments - if we sell out of a stock it will be moved to “Past Investments”.