The MicroCapClub Indices showcase some of the best ideas we can find for the short-term and longer-term as profiled here on MicroCapClub
MicroCapClub has two indices including the MicroCapClub Active Index (MAI) and MicroCapClub Passive Index (MPI). The purpose of these indices is to highlight where we think some of the best opportunities are on MicroCapClub profiled companies. The characteristics of these indices are summarized as follows:
MicroCapClub Active Index (MAI)
The MicroCapClub Active Index strategy is to contain a diversified collection of companies in the microcap space that appear to have favorable odds of significant near term appreciation. It is primarily a growth portfolio that follows Mike Schellinger's (aka@MikeDDKing) My Secret Recipeapproach to investing although value and special situation companies also are included when they have favorable risk/reward profiles. The MAI will rarely be fully invested ascash is a position. Purchases are only made when suitable ideas are available.
The MAI is managed by @MikeDDKing. The index was originally hosted onInvestorsHub from inception on 10/01/2009 where it was named the SwingTrade Portfolio. On 12/16/2016 it was moved to MicroCapClub and renamed the MicroCapClub Active Index.
MicroCapClub Passive Index (MPI)
The MicroCapClub Passive Index strategy is to own the best microcap businesses we can find to be held for the long(er) term or until the story changes. MPI will target quality businesses that are self funding compounding machines that have long-term growth prospects. Due to the more long-term nature of this index, the buy points aren't as valuation focused. The main qualifications desired for constituent companies are:
Sustainable Long-Term Growth Prospects > 3+ Years
Market Leaders – Dominate a small market that is expanding
Owner Management and Board >10% of Outstanding Shares
Self-Funding – No need to raise capital
Low to No Debt
Clean Share Structure
Low to No Institutional Ownership
Many of the companies in the MPI will be in the MAI first and may be simultaneously held by both indices.
The MPI is managed by@Ian Cassel and @MikeDDKing. It’s important to note that the MPI will NOT reflect a concentrated strategy but a diversified strategy with the aim of including quality longer-term microcap opportunities.
Trades in constituents of the indices are done in real-time during the trading hours to enable timely updates and to ensure that actual trading volume fairly enabled the trade. For example, we will not buy/sell 10,000 shares when only 100 shares traded at that price. A post is made in real-time on the board to indicate the trade. The portfolio valuation is updated at the end of each month. For quick reference, the end of month performance of the indices is located on the right sidebar or on the bottom. Note that the indices are not represented by actual brokerage accounts and thus there are no transaction costs. All transactions including those in foreign securities are in US dollars.