I always enjoy reading books by experienced microcap investors. I first heard of Russell Cleveland when I was an investor in Global Axcess Corp (GAXC) a few years ago and I noticed he also owned the stock. I read about him and found he had a similar investment philosophy to my own. Russell Cleveland is the principal founder and the majority shareholder of RENN Capital Group, which provides capital to emerging public companies. He has more then 40 years experience investing in microcaps. Russell wrote Finding Midas in 2007, which goes into detail on his investment philosophy in picking microcap winners.
Finding Midas is a short book and will only take you a couple hours to read, especially if you are a microcap investor. Russell’s vision for the book is simple, microcap success is all about betting on the jockey. In the book they call it Entrepreneurial CEO Investing. Russell only buys a microcap stock that has certain leadership characteristics. First, the CEO must own a meaningful position in the company and have a clear vision for the future. He tells you how to find them and gives several examples and criteria in the book. Second, the company must currently be profitable, and you must be able to buy the stock at a reasonable price. Again, more detail can be found in the book. Lastly, he believes you should hold around 10-20 positions to diversify risk, and then he provides his selling criteria. The last half of the book he gives case studies of Entrepreneurial CEO Investing successes and lessons learned.
I really enjoyed the book and I share many of Russell’s microcap investment philosophies, the most important one being, you bet on the jockey. I’m going to see if I can interview Russell Cleveland in the future.
The MicroCapClub (mc2) is an exclusive micro cap forum focused on micro cap companies (sub $300m market cap). The MicroCapClub was created and founded by Ian Cassel as a way to share ideas and to learn from other seasoned like-minded micro cap investors. Our goal at MicroCapClub.com is quality membership and quality stock ideas. If you are an experienced micro cap investor, feel free to Apply today.