Regal Assets Analytics

GEO Investing

In this edition, we get back to our video focus by covering my appearance as a guest on a podcast hosted by Tobias Carlisle (@greenbackd), The Acquirers Podcast. Tobias is the author of The Acquirer’s Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

Even though I had this conversation with Tobias in 2020, I thought it would be a great idea to bring it to light again for investors that began following our newsletter since then. It serves as a great primer to get familiar with parts of my full-time investing journey, just in case you have been contemplating upgrading your experience on Geoinvesting through a subscription to our Premium Subscription here.

We discussed my early years of investing and some of the most important things that shaped my investing journey.

During the interview, we delved into a range of topics including…

Last week, we held our April 2023 Live Member Open Forum. It was a bit longer, but to be honest, we can’t get away from having 1 longer-running forum every quarter –  justifiably so –  because earnings season typically raises the intensity with which we operate and increases the volume of stories we have to process.

The forum this time around was also made a bit richer because of a guest pitch by a regular research and stock idea contributor/GeoInvesting member, so we didn’t mind the added tape.

We invite Geoinvesting subscribers to publish their stock pitches  to help you build your research pipeline. At times, we add some of the stocks to our model portfolios. Our research contributors have produced cumulative peak returns of 36,050% over 78 pitches  (22 with over 300% returns) since 2015, when we began accepting applications to submit ideas. If you are interested in submitting an idea to be published on Geoinvesting or want to help us to get through our own idea flow generation process, please contact us.

In light of the volatile market conditions we are facing, we have been focusing on topics such as:

Recession Resistant Stocks.
Company Turnarounds.
Boring but Slow Growing Companies.
Microcaps with Big Cap Revenue.

For this Monthly GeoWire issue, as a followup to our short prelude on on Chapter 11 exits, we are once again focusing on successful Chapter 11 exits – companies that have weathered their own respective storms through debt and bankruptcy filings and have not only emerged successfully, but performed remarkably well since then, both in terms of performance and stock price. 

I am no stranger to investing in and studying Chapter 11 companies.  Before I launched  GeoInvesting in 2007, I invested in stocks after they emerged from Chapter 11.

My journey in this genre of special situations started with Storage Technology (STK) in 1990. As a matter of fact, this was my first foray into special situation investing.

A few years later, I bought shares of paging companies MetroCall and NII Holdings, two companies that were casualties of the dot com and related telecom bubble. They both ended up turning into multi baggers.

Before Monster Beverage Corporation (NASDAQ:MNST) was the energy drink we all know today, it went through a Chapter 11 bankruptcy under the name Hansen Natural Foods (HANS). I captured a tiny piece of its Multibagger history, as I discuss later. 

Having been through 3 bear and 2 bull markets, our history is rich.

We’ve accomplished quite a bit on both sides of the equation, recently experiencing the brighter side of things from March 23, 2020 (Covid trough) to January 3, 2022 before a microcap winter for many, including us.

During this period of nearly 21 months, we posted an average 134.96% rise in holdings that were initiated after December 31, 2016 and closed and/or still open by the time the bull market ended (a total of 67 unique model portfolio stocks).  Yes, while it’s true that the 2020 Covid bull run was a great outlier period when it was hard to lose money, we still managed to beat the S&P by 20%. Furthermore, the stats we highlight later will show that we had above-average returns well before this 2016 to 2021 timeframe. As an initial example, in each of the last 10 years going back to 2012 through the year 2021, we’ve logged at least 7 stocks per annum that have gone on to at least double during our holding period.

When 2022 came along, it created another challenging period for investors. Last year put into perspective just how unpredictable and frustrating investing can be, especially when you are dealing with a group of stocks that investors might tend to ignore or abandon, lending to thin trading and extended periods of price stagnation or decline. When some of 2021’s duds turned into 2022 duds, we knew we were in for a disappointing ride. But a little later, we’ll get into the strategies we are employing that are perfect for the next bull market, which we feel is right around the corner. Our goal is to even better the performance we logged in the prior bull markets.

We’ll be getting back to the normal Monthly GeoWire format next month, but we wanted to take this first edition of the new year to look back at everything we were up to in 2022. Don’t worry, we will be getting back to our normal video format starting in February. 

This month’s GeoWire will be split up into 2 issues –  one today, and the other next week. A lot happened in 2022, and we thought it was best to split it up into two separate posts to be able to put adequate focus on the themes we want to discuss.

This Week: The stock market and recession, our new Model Recession Portfolios, and still the chance to participate in our special offer for 2023.

This week, the video component of our monthly newsletter series continues with 5 insightful video clips from Jim O’Shaughnessy, parsed from a “Talks At Google” interview moderated by Saurabh Madaan.

Jim O’Shaughnessy, investor and founder of O’Shaughnessy Asset Management LLC, discusses what it takes to be a successful active investor.  He shines a light on the contrast between active and passive equity investing including the associated risks and rewards.

O’Shaughnessy covers several traits required by successful active investors, including patience and persistence, a strong mental attitude, a focus on process over outcome, and the courage to ignore forecasts and rely on one’s own research data.

O’Shaughnessy also offers guidance from his years of experience as an active investor, citing key points from his book What Works On Wall Street. He discusses the importance of momentum and earnings in putting together your portfolio.  He also delves into market cap, lottery stocks, shareholder yield, and applying long-term data in one’s investment strategy.

We hope that you enjoy O’Shaughnessy’s insights into what it takes to be a successful active investor. Hint, it’s much harder than you think.

Our monthly newsletter series continues with our new, alternative format of highlighting insightful video clips and discussions that give you a glimpse into personalities that have paved the way for many investors to approach various investing strategies to find what best suits your preferences based on your own goals.

From education and strategies to case studies, below we have lined up three personalities today to help you further understand a particular theme we have been highlighting which we believe is particularly relevant in today’s market environment – GARP (Growth At A Reasonable Price), It’s a topic we have heavily focused on throughout 2022 and in the past have described it as follows:

This month, we are continuing our video clip and discussion series that gives you a glimpse into the personalities that have paved the way for many investors in how they approach different strategies to find the best stocks in the market.

This month we are continuing our video series, highlighting 3 full length videos that we believe are too good to be clipped.

One video we picked for October is salient because we’re at a moment in history when keeping your emotions in check is as important as ever.

We’re also putting a spotlight on replays of live management interviews we hosted for two companies – one for Richardson Electronics, Ltd. (NASDAQ:RELL), an electronic component/engineering design company hitting on all cylinders, and the other on a high risk turnaround restaurant play, Muscle Maker, Inc (NASDAQ:GRIL).