The Business Brew Bill Brewster

Ian Cassel stops back by The Business Brew to check in.  As you may remember, Ian is a full-time microcap investor and founder of MicroCapClub. Ian started investing as a teenager and learned from losing his money over and over again. Today he is a full-time private investor that supports himself and his family by investing in microcaps.  He is also the author of two books:



Intelligent Fanatics Project: How Great Leaders Build https://www.amazon.com/Intelligent-Fanatics-Project-Sustainable-Businesses/dp/0997576502/?_encoding=UTF8&pd_rd_w=7vP7f&content-id=amzn1.sym.22f5776b-4878-4918-9222-7bb79ff649f4&pf_rd_p=22f5776b-4878-4918-9222-7bb79ff649f4&pf_rd_r=140-2211477-9010244&pd_rd_wg=oufjI&pd_rd_r=438a9be9-ba2c-44c0-a800-30367bc020a7&ref_=aufs_ap_sc_dsk



Intelligent Fanatics: Standing On The Shoulders of Giants https://www.amazon.com/Intelligent-Fanatics-Standing-Shoulders-Giants/dp/0997576537/?_encoding=UTF8&pd_rd_w=7vP7f&content-id=amzn1.sym.22f5776b-4878-4918-9222-7bb79ff649f4&pf_rd_p=22f5776b-4878-4918-9222-7bb79ff649f4&pf_rd_r=140-2211477-9010244&pd_rd_wg=oufjI&pd_rd_r=438a9be9-ba2c-44c0-a800-30367bc020a7&ref_=aufs_ap_sc_dsk



Ian and Bill chatted because there was some noise about small and microcaps being cheap.  Then Bill said “Come on the show.”  And Ian said “Sure.”  And then they had this conversation.  And now you are listening.  We hope you enjoy!

 

This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund
letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc.

Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off.

Thank you to the team at ⁠thepodcastconsultant.com⁠ for producing the show.

Detailed Show Notes - 



2:50 - Staying patient in illiquid ideas



6:28 - The MicrocapClub conference



10:20 - Findings a micro cap worthy of holding



12:03 - Fallen angels vs rising stars



18:50 - Quality vs value



25:50 - What is Ian looking for in investments



28:20 - Look global for microcaps



30:20 - Why it is easier to raise money internationally than in the US



35:50 - SPAC talk



47:50 - Cogstate



1:00:30 - How microcap changed over the past year



1:05:50 - Training LPs, and yourself, to handle volatility



1:06:50 - Why the first discovery is powerful



1:11:30 - How Ian started MicroCapClub



1:13:05 - Some briefy therapy



1:15:30 - Concluding conversation

Devin Anderson, CEO and co-founder of Convexitas, stops by The Business Brew to discuss his firm's approach to risk management via options strategies. In short, Convexitas seeks to exploit structural options mispricing resulting from market participant's biases. What does that mean in plain English? Well, there are people that sell financial yield strategies that involve selling puts and selling covered calls. If enough of the market does that there is a chance the front month option pricing is not high enough. In that case, Convexitas might consider purchasing some of those options.



Why is Devin worth listening to?
Before Convexitas, he was at Deutsche Bank for 15 years where he most recently was Managing Director and Head of Solutions in the Americas leading the structuring and sales teams which designed and distributed the risk premia, retail structured product, and the fund derivative businesses. His Deutsche Bank experience also includes covering institutional clients for listed options and OTC derivatives. Prior to the financial services industry, Devin had a previous career in technology where he held both engineering and sales roles at two early stage internet service & datacenter hosting providers, and former search engine Lycos. He holds a Bachelor of Finance from the University of Pittsburgh and an MBA from Carnegie Mellon, where he also guest lectures on options and option market micro-structure.


In short, the guy is smart and you can learn something.



Enjoy the episode. Hope you enjoyed this show note!






This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc.



Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off.



Thank you to the team at thepodcastconsultant.com for producing the show.



Detailed Show Notes - 


2:00 - Devin's background



6:25 - Convexitas is a very risk focused firm



12:00 - The decision to reduce risk vs. manage risk



15:15 - What Convexitas is very good at



19:40 - Why an options thesis should start with the behavioral biases of the options market



24:50 - An options position should be better than a resized cash position



27:30 - If at any time short options strategies are changing your lifestyle then you should probably do less of it



35:00 - What about options counterparty risk?



37:30 - A discussion of one day options and why they exist (hint: they are a great business for market makers)



41:50 - How was Convexitas started?



45:10 - Does AI help Convexitas and/or is it a risk?



53:00 - It's not actually the risk, but how you manage to the risk



57:40 - The difference between financial products and investment products



1:01:25 - Performance under pressure and mindfulness

Michael Batnick, author of The Irrelevant Investor blog (https://theirrelevantinvestor.com/) and Big Mistakes: The Best Investors and Their Worst Investments (https://www.amazon.com/Big-Mistakes-Investors-Investments-Bloomberg/dp/1119366550) and Co Host of The Compound and Friends (https://podcasts.apple.com/us/podcast/the-compound-and-friends/id1456467014 for Apple and https://open.spotify.com/show/5VKsKPZUtwVylxslLie36k on Spotify) stops by The Business Brew for a quick chat.



In this episode Bill and Michael discuss Michael's book, his early days breaking into finance, his early investing style, and how he looks at the world now. They also touch on some personal chit chat at the end. Please note this episode was recorded before Bill's episode with Tom Gayner. Bill talks about Tom searching for ideas on the 52 Week High list. That part of the conversation is somewhat inaccurate and you should listen to Tom's episode for clarification.




This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc.Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off.

Detailed Show Notes



4:50 - Mark Twain as an investor



7:00 Mike's background and building an online presence



13:00 - How Mike got through a bad first job



18:00 - Dealing with emotions while investing



19:00 - How Future Proof started



21:00 - How Mike approaches The Compound and Friends



24:30 - Helping Clients



28:00 - Why people should consider buying stocks that have gone up



35:00 - Stock chit chat



37:00 - Writing Big Mistakes

Dan Zwirn, CEO and CIO of Arena Investors, stops by The Business Brew to discuss his investing strategy.  Arena Investors, LP is a registered investment advisor that originates investments (generally below $50 million) with borrowers and other counterparties who need access to financing and are otherwise not able to access conventional sources.  They have complete mandate flexibility across industry, product, and geography.   



In Dan's words, "The real beauty of our approach, to me, is that there’s no ceiling on the creativity we can use to shape alignment for our clients, our partners and ourselves. If someone needs capital and there’s any way to do it that makes sense for all parties, we will find that way."



Bill enjoyed this conversation very much and hopes you will as well.   



Arena's Website: https://www.arenaco.com



Dan's Investor Letter: https://www.arenaco.com/wp-content/uploads/2023/03/Arena_Investors_Letter_YE_2022.pdf   



Dan's Official Bio: https://www.arenaco.com/team/daniel-zwirn/




This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc.Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off.





Detailed Show Notes  



What Arena does - 3:30 



How big money invests at times - 6:30 



Process oriented vs. security selection - 9:30 



Financial Products vs. Investment Products - 13:10 



Why Arena has invested in servicing - 19:30 



The incentives to not see what is going on - 22:10 



Where are we in a credit/business/fiscal cycle - 25:00 



How Arena thinks about opportunity - 32:30 



How Arena thinks about LTVs - 39:05 



"We are at a casino and there has never been more gamblers" - 44:00 



Are defaults bad? - 48:00 



Does diversification solve all problems? 52:30 



A CLO discussion - 56:50 



What is going on with the job market - 1:03:30

Mike and Eli, hosts of Chasing Scratch: A Golf Podcast, join The Business Brew to discuss their podcast, how they monetize podcasts, what they were trying to accomplish when they started podcasting, and, yes, golf.
Bill is a huge fan of the podcast they have put together.  Check it out on your favorite podcast player!
Apple: https://podcasts.apple.com/us/podcast/chasing-scratch-a-golf-podcast/id1281285953
Spotify:  https://open.spotify.com/show/2W77oe7Nw7G8RzKkhsMi5E




This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc.Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off.

Tom Gayner stops by The Business Brew to discuss a number of things. You can see the detailed show notes for specifics, below the stratosphere.io sponsor copy. In summation, Bill has wanted to interview Tom for a long time but didn’t know how to make the interview unique. We think this interview covers some topics Tom has not discussed elsewhere.

Please consider attending Markel’s annual meeting. On Wednesday, May 17th, from 9-10:30 the good folks at Robotti and Co. are hosting an investor panel. There will be 8-12 “best ideas” presented. The Markel annual meeting will follow that event. Food, music, and beer will follow the Markel annual meeting.

We hope you enjoy this podcast episode.

This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc.

Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off.

Thank you to the team at thepodcastconsultant.com for producing the show.

Detailed Show Notes -



5:00 – The goal of the Markel annual event



7:30 – Tom’s background



9:35 – Blue capital and orange capital



17:05 – Creating dealflow and how long that takes



20:10 – Learning how to delegate



24:55 – What happened with the ILS transactions



33:20 – Searching New Highs and New Lows



38:40 – How investing at Markel does or does not impact Tom’s investing style



34:20 – The intertwining of Berkshire, Markel, and The Davis Funds



43:50 – The importance of relationships



48:40 – The Big Lebowski



49:10 – What traveling to India has taught Tom



56:25 – Decisions in March 2020 and how being at Markel impacted Tom



1:02:20 – How was the transition from Co-CEO to CEO



1:05:40 – How to be a deserving spouse



Book Mention:

The Way We Live Now

https://www.amazon.com/Way-Live-Now-Penguin-Classics/dp/0140433929/ref=asc_df_0140433929/?tag=hyprod-20&linkCode=df0&hvadid=475771750252&hvpos=&hvnetw=g&hvrand=16689022937612321338&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9011844&hvtargid=pla-469518675534&psc=1