Kyle and Paul Andreola discuss evaluating smallcap stocks, focusing on profitable growing businesses, the PEG ratio, understanding capital raising, and the importance of value. They also talk about the current state of microcaps. Paul Andreola is a successful microcap investor managing his own money for over 30 years. He's a board member for Atlas Engineered Products, Total Telcom, and Departure Bay Bay Capital. He runs Smallcap Discoveries, where he interviews CEOs of microcap businesses and shares his strategies. IN THIS EPISODE YOU’LL LEARN: - The importance of flipping over as many rocks as possible - Why focus your efforts on profitable businesses that are growing - The power of owning businesses that institutions can’t invest in - Why you should stay away from low-growth businesses even when they are cheap - How to use the price-to-earnings-growth ratio to help you identify undervalued growth stocks - How to add a margin of safety using the PEG ratio - How to use the PEG ratio to help you determine what needs to be sold - How increasing fund flows can attract low-quality businesses in search of capital - Why owning profitable companies can de-risk your investing - Why you should stay away from businesses that are likely to heavily dilute shareholders - The importance of having a board member with capital markets experience - The hidden costs of financing - The role of intangible assets in finding financing - When it makes sense to use equity for funding - The importance of buying businesses that have minor struggles that are fixable - Why businesses that are struggling can offer significant upside - When and why averaging up makes perfect sense - Why you should be flexible on how much concentration you put into a position - Why averaging down is a losing strategy - How opportunity cost should help govern your portfolio allocation - The positive tax consequences of holding positions - Strategies for selling your losing legacy positions - The one question to ask yourself about positions to make sure it’s right for your portfolio - Why building an investing network is so important - Why value will always do well despite overall market conditions - Why increases in financing is a signal that capital is coming down the market into Small Caps - What Paul likes to do when it’s harder to find good opportunities - Why institutional capital inflows are the primary driver for increasing returns 🤝 Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members: https://theinvestorspodcast.com/mastermind 📈 Learn to invest like legend investors do — from the company that has interviewed them. Use YOUTUBE15 to get 15% off! https://theinvestorspodcast.podia.com/how-to-get-started-with-stocks 💰Click here to download your FREE guide to Stop Worrying About Your Finances In 4 Simple Steps: https://www.theinvestorspodcast.com/subscribe-youtube/ 📊TRY OUR STOCK INVESTING TOOL: TIP FINANCE https://www.theinvestorspodcast.com/tip-finance/ ▶️ RELATED EPISODES: - How to Find 'Lightning in a Bottle' Businesses | Microcap Investing w/ Ian Cassel: https://youtu.be/6OLSQzrwQeI - Why Microcaps Are Outperforming w/ Ian Cassel: https://youtu.be/MnU4_lTiXr4 - Multi-bagger First Principles | Finding Stocks That 10x or More! w/ Ian Cassel: https://youtu.be/gPJ78EQSsOg - A Decade Study of Global Top-Performing Companies | Global Outperformers w/ Dede Eyesan: https://youtu.be/a6OjL8JNGCo 🎧 Listen to our episodes here: https://open.spotify.com/show/28RHOkXkuHuotUrkCdvlOP 🖊️ Access the transcript and learn more about the guest here: https://www.theinvestorspodcast.com/episodes/small-but-mighty-uncovering-smallcap-value/ 💡 OTHER RESOURCES - Seeking Alpha is a crowd-sourced content service for financial markets. Take control of your financial future — Use our link here for a 14-day free trial: https://www.sahg6dtr.com/59QC8Z/R74QP/ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ABOUT OUR SHOW 🎙  On We Study Billionaires, we interview and study famous financial billionaires including Warren Buffett, Bill Gates, and Ray Dalio. We teach you what we learn and how you can apply their investment strategies in the stock market. 🌍 Website: https://www.theinvestorspodcast.com/we-study-billionaires/  📝 Help us understand our audience better so we can create a more intentional user experience by answering this survey! https://www.theinvestorspodcast.com/survey2023-youtube ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ 📚OUR FREE INVESTING COURSES/RESOURCES https://www.theinvestorspodcast.com/tip-academy/ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ❗ DISCLAIMER: This show is for entertainment purposes only. Before making any decisions consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.