MI290: Untapped Value: Unearthing Undiscovered Stocks w/ Paul Andreola

24:03That's kind of what I've seen historically happen. So as I'm getting older, maybe it's my conservation nature as I get older or just laziness or what, I'm saying no more often and I'm trying to really find those fat pitches or those opportunities where my risk is far away by my upside. And it gives me that ability to take a chance. And like I said, part of my sizing is my strategy to mitigate some of that risk as well. You mentioned previously that every six to 12 months that you like to go through all companies in your investable universe, starting with the A's and down to the Z's. You mentioned that this process usually can bring up anywhere between five to 10 names that interest you, but I'm interested in knowing how long this process takes and outside of obviously finding interesting names, what other hidden benefits does this process give you?

24:55So it usually takes, I've got a partner that I work with that helps me go through these. So we sort of compare notes at some point, but it'll take me a solid week. I basically have to lock myself in a room and have my wife feed me under the door for about a week as I go through these things. But so yeah, we do it two times a year and we've already got a comfort level with these companies because we've seen them already. So it doesn't take us an indignant amount of time to review them. But the benefit is that we feel confident that nothing's slipping between our fingers, right? So we're making sure that we've got the whole landscape covered.

25:29But the other thing it does is that it helps us when we find things or we don't find things, it helps us gain confidence in our existing portfolio, right? We want to feel like we have the best stocks that are hitting our criteria out there. And if we review at all times, then we're, we sort of know, you know, where the good stuff is and hopefully it's in our portfolio, right? So it gives us that added comfort that, you know, that we own the best of the best in the space that we're looking at. Yeah, that makes sense. And so you mentioned that you have a partner. So does having the partner definitely make that process of going through them a lot quicker?

26:05Like, are you guys, you know, splitting it up 50, 50, or are you literally all just going through it, both of you going through all of them and then just kind of comparing notes between everything that you find? Yeah. So we go through all of them and then we compare notes, right? So it's not that it makes it quicker. What it does, if anything, it makes it longer because we will argue things, right? Which I think is very healthy. And we come at it from different angles too, right? So my partner used to work for the TSX exchange. He was an analyst there. So he has a slightly different view on things.

26:34He's a lot more looking into some of the reasons and some of the filing components of what they've done. Whereas I'm looking at it much more from a fundamental standpoint. And then, I mean, the other big piece we do is we actually look at some of the people and, you know, because of our context within the industry, we sort of get a bit more due diligence on some of the people, not just in management, but in microcap space, you have to understand there's a lot of people in the background, right? There's a lot of financing people and people that are, you know, major shareholders and, you know, things like that that you need to know.

27:03So coming at it from two different angles, coming at it from different viewpoints, being able to argue different ideas. I find that very, very helpful. How do you view shares outstanding growth during the discovery process? Since many of the businesses you are looking at are just recently turning profitable, is it safe to assume that many are going to be issuing equity in order to finance their growth? And how do you factor dilution into whether the investment will create value for shareholders as they continue to grow. So that is one of our key criteria we look for is the amount of shares that's standing.

27:36And we try to determine what the financing risk is, right? What's the risk that they're going to need to finance and dilute some more. So one of the nice things is when a company does turn profitable, right? That's sort of the gatepost, if you want to call it that, where they're finally in position that they don't need the market to continue to fund them, or at least they're significantly closer to that point. So it's not unusual though, to see companies at that point still want to get some outside funding because, you know, they may be growing now for a reason that requires them to bring in more money.

28:03You know, they've launched a new product, they want to grow faster. Maybe they've seen some acquisition opportunities, but usually when they get to that inflection point, the reason they're looking for cash is to further grow their business, right? Either through an acquisition or product launch, something like that. So it's actually a good reason to raise money, in my opinion. If a company's burning money, if they continue to lose money. We find that is not as good a reason to go and raise money. So we try to avoid that. But I almost say at that point, it's less than 50-50. There's still a lot of companies that will go out and raise money, but the majority won't.

28:36And sometimes we look at the companies that are raising money. Sometimes that actually turns out to be an opportunity because these are illiquid companies in a lot of cases, especially if insiders own large positions. Sometimes we'll actually approach those companies and say, look, your balance sheet is still a little offside. you need some money why don't we raise the money why don't we give you the money that's how we get our position you guys get the capital you need you know you've got a good sort of capital markets partner and you guys can you know accelerate your business so we don't necessarily view it as negative we view it as potentially as an opportunity but it is something we we want to really understand and once we're involved we want to kind of see that there's not a lot of reasons to go and raise more money unless it's something that's going to really really change the growth pattern in the So I mentioned previously about how you enjoy using kind of momentum and looking at stocks that are trading at those 52-week highs because it is starting to show an inflection point in the business.

29:30So with that, obviously, stocks trading at 52-week highs can obviously be offering returns that aren't necessarily the best. So how do you interplay looking at stocks at the 52-week highs as well as value? And are you finding that in the microcap space that there are sometimes stocks at those 52 week highs that just, they're not feasible investments because of the price? The function or understanding what drives a 52 week high is something that sort of has made my strategy what it is. But I don't just buy companies that are hitting 52 week highs. Sometimes I'm the driver or, you know, sort of the discovery process, whether it's me or somebody else, that's what starts to drive this sort of move or trend towards 52 week highs.

30:17So more times than not, because I've got a larger pool of capital than I started with years and years ago, I'm more confident in buying before it's hitting a 52 week high, if the fundamentals make sense to me. And then what ends up happening, because some of these companies are relatively liquid, I'm the driver of that 52 week high, or somebody like me is the driver. But now because I understand what's driving it, you know, the company's been discovered, the company is now being noticed. And if I have a position and I'm starting to see that happen, then I understand where it is in that discovery process, right?

30:50So it's not make or break anymore. I don't need to see a 52-week high, but I love to see it once I feel the discovery process has started. And then I can fine tune how I sort of act based on that 52-week high, right? So I'm not afraid to add to my position because it's hitting a 52-week high. That's actually encouraging me to add to my position. So it's things like that, having understood what it all means, the background fundamentals that drive it, the background discovery process that's driving it. And then ultimately, it helps in determining how I go about selling position if necessary. So you've said in previous interviews that after buying a stock, you're often trying to find reasons that you would not want to add to the position.

31:32So obviously, it's going to be company dependent. But what are some of those types of fundamentals of specific businesses you're following that help you determine when a business is indeed improving and maybe you should be putting more of your money into? So really you establish a thesis as to why you want to own at the beginning. So, you know, company, let's say a company's growing at 30 % a year, it's trading at single digit price earnings ratios, you know, its earnings are growing nicely. There's leverage in the business. These are some of the fundamental reasons why we actually want to own that stock.

32:03So provided those things continue to happen, sometimes we see an acceleration of growth. We see acceleration of that sort of stock. We're going to continue to own that stock. We're going to continue to want to own more of it if it keeps sort of giving us a margin of safety to what we think the real value is. So those are the drivers that we're going to constantly look for. Now, if something breaks down and all of a sudden, you know, the company's not growing anymore, well, that starts to give us a reason to look at selling, right? That's one of many different reasons, but that's one that we're going to look at.

32:32And then remember, we're not just looking at our portfolio. We're measuring our portfolio against everything else that we have an opportunity to invest in. So if we see a company that's growing at 30 % a year and it's trading at 15 times earnings, but we just found another one that's growing at 100 % a year and trading at 10 times earnings, well, we've got to offset that decision. And maybe that's a reason we're selling, even though this other one is doing okay. What are some red flags that have been thrown up in an investment that you've already purchased that have prevented you from adding to a position or maybe trigger you to exit earlier than expected?

33:08So you mentioned a little bit just previously, but how are you looking at, say, returns on capital, margins, KPIs, are all those types of things also going to be helping guide your decision making if you need to get out or add or just maintain a position? Yeah, so exactly. That's exactly what we're looking for is some deterioration in the underlying business, whether it's something that's, Again, like I said, the growth has changed or maybe the profitability has changed. We want to understand why these things are happening. Sometimes you'll see them because they're going to, you know, they're investing in future growth.

33:39Their, you know, their R &D spend is going up because they've got some new products they want to launch. Maybe they're, you know, spending more in marketing because they want to get more aggressive and growing the business. These are all things that you have to sort of understand to determine what the future outlook looks like and, you know, what the risk profile and whether it's changed or not. So those are things we look for. But more significantly, the fundamentals can be relatively easy to understand and see if there's deterioration there. But there's a lot of capital markets things that micro caps do that I think are red flags, right?

34:08When you see them start to issue a lot of shares, when they're looking at financing for reasons that don't make a lot of sense, or they're spending egregious amounts of money on investor relations or something that doesn't make a lot of sense, you have to question their capital markets sort of savvy. and I've seen a lot of companies sort of fall apart when they don't understand that part, right? Maybe the insiders don't own enough stock, so they're trying to, you know, they don't have the same vested interests as shareholders do. You've got to watch the capital market steps that they make very carefully.

34:40And, you know, I learned years and years ago that, and this is part of our due diligence, is you want to really understand the makeup of the board and to see if there's someone in there that can help guide the CEO in making sure he doesn't make sort of standard capital markets mistakes. And there's lots of them. We see a lot of that that goes on. And sometimes it's not the fault of the CEO. They just don't know better and they're getting some poor advice. So looking at that board member that you just discussed who could maybe help guide, how do you know what person to look for in the board? Is this just part of your due diligence process when you're looking at a specific business or is this kind of just kind of insider knowledge that you know from having worked in the industry for so long?

35:19So it's a little bit of both. A lot of times when we do look at a company and sometimes, you know, through an interview with management, we try to determine who on the board has a vested interest, meaning they own a significant amount of shares and have capital markets knowledge, right? So somebody, you know, usually you see a board that has certain different industry expertise, and sometimes it's all based on the industry that they're in. And that's fine. But when you get a legal question, when you get an accounting question, when you get a capital markets question, who are their advisors, right?

35:48And if their advisor is an investment banker, then, you know, we get nervous because there's two different sort of perspectives or, you know, incentives there. So we want to know that somebody that's sort of been in the capital markets, ideally, is sitting on the board and can sit there and say to the CEO, no, you don't want to do that. You don't want to do that kind of financing. You don't want to spend that kind of money on IR. You don't want to do those things, right? They're doing it because they've got a vested interest and making sure the company's fine. So we constantly ask and try to determine who on that board has a meaningful stake in the business and has that experience to be able to tell that CEO, this is what you should do and this is what you shouldn't.

36:25Yeah. And quite frankly, it goes for everything else on the board, right? You want to find a board that has good rounded expertise that the CEO is going to draw mentorship from or advice from. And without that, you question what that boards really do. So I know that you've been a pretty concentrated investor in the past. You discussed that you've had one stock make up to something like 60 to 70 % of your portfolio at one time. May I ask what that name was and what are normal levels of concentration for you like today? I've had a number of them, so it's not just one, but Expel was an example. Now, part of the problem is, and you sort of wish this because it didn't start off as a 60, 70 % piece of my portfolio, right?

37:06It grew into that. And when you have a company that's going up 10, 20, 30 times in value, like Expel did pretty quickly, it can be oversized position. I'm not a believer that you trim because it's become a big percentage of their portfolio. You want to constantly make sure that you got that Wayne Gretzky in your lineup, right? And if you've got them, you put them on the ice as much as you can, you hold them as long as you can. And then when you see he's losing his edge, then maybe you take him off the ice a little bit. So that's my approach. It's always been my approach. I never, ever, you know, a starting position is never going to be an outsized position.

37:38It's going to be a couple of percentage points and they have to earn their way in, right? So I could grow a position of maybe 10, 15%, but at that point, if it's going to get any bigger, it's going to get bigger because it's just moved in size, right? So that's sort of the makeup of my portfolio. I'm not afraid to concentrate. I tend to know these businesses better than almost anybody else at part of what we do. And like I said, that confidence also comes from the fact that we're constantly looking at everything else that's available and we're comparing it to everything else. So if it's gotten that size, it's usually because it's just better than everything else we see that's available and we're just not going to sell.

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41:36All right, back to the show. What are normal holding periods like for your stocks? Do you average up when the opportunity set looks like it will be longer than when you first imagined? So for instance, let's say you put in a full position by cost basis of, like you said, maybe 10 to 15%, if the business is just continuing, like maybe you observe that it has five more years of growth that you didn't account for before, will you continue averaging up or do you kind of set hard limits on that end of the portfolio management spectrum? I love averaging up. I love it. I love it. I love it. I've learned the hard way to love it.

42:13So much of this is all through experience and what I've dealt with. So my biggest mistakes in the market have not been, hey, I bought this stock and it went down. That's normal. It happens to everybody. And my biggest mistakes have always been, hey, I've got this one stock and it's going up and why don't I start selling it because it's going higher and I'm making money. But you know, where I really learned this the hard way is I had a company years and years ago called Bowflex. And Bowflex, if you're old enough, you remember those exercise machines and you name it on TV. But it was a company that was growing very rapidly.

42:40It was an undiscovered company. I'd bought it around a dollar a share. And within about a year and a half, it was, it had already 10x. It was like$11,$12. And here I am thinking, I'm a genius. I'm selling this because I'm up. Even though the company was still putting out the numbers, it was still very cheap based on its growth profile. And I'm selling it, right? And this thing eventually, I think after splits and everything, it went about to$250,$300. I mean, it's still around. It's called Nautilus and the New York Stock Exchange. It was just a monster. So my mistake wasn't sitting there and owning the stock.

43:10My mistake is actually how I held it and how I sold it, right? I should have been averaging up all the way. Instead of selling it all the way up, I should have been averaging it. So having learned that from so many situations, if you find a company that is fundamentally still proving out your thesis, that you can argue is still undiscovered and giving a margin of safety to what you think the valuation is, it's telling you you should keep buying it. Keep buying it until your thesis breaks or until you have something else that's just egregiously more obvious than this one. So for me, I love averaging out because it's a sign that business is doing the right thing.

43:43It's a sign that the discovery process has at least started and I'm comfortable owning these things for a very long period of time if they continue to perform. What are your normal holding periods like for your stocks? Do you, I mean, obviously you'll, it kind of depends, I guess, right? There's certain businesses where, you know, maybe you're only looking for a two to three year opportunity or maybe even shorter, but on average, how long would you say you like to both look for holding a stock and how long do you actually end up holding stocks for? Well, first off, I'll say my losers, I hold too long and my winners, I hold too short.

44:18No matter what, if I hold the loser for a day, it's too long. What I find is, look, I've got some stocks that I've held for five or six years and I'm comfortable. I don't set any kind of timeline target. It's strictly a valuation target. And if anything, the most, or the reason I sell more times than anything else is because I found something that's just a better opportunity, right so that's usually the driver of something so i've got no problem holding stocks for five to ten years provided that i don't find something that's a better opportunity so it's rare that you know after five or six years i can't find something that's a better opportunity because if things are working then that whole discovery process which you know we haven't talked too much about but you'll understand what drives it and our belief is that once the company's fully discovered you're only going to get the performance of the business rather than that discovery arbitrage that you can get.

45:09So why don't we dive into that discovery process in a little more detail? What specifically are you looking for in the discovery process that has helping you get these outsized returns in stocks that are trading not only at very low evaluations, but are also growing very, very fast? so our belief and i think it's played out by you know a lot of the books we've read and uh even the experience that we've had but stocks change in value based on how many people really come to understand that business so you know some companies will will toil in obscurity because there's nothing that's going to trigger that discovery they're either not making enough money or they're not exciting enough to get somebody interest in the stock but from time to time companies that are going to do very well, something will trigger a sort of initial level of discovery.

45:58So it could be an earning statement. It could be a newsletter writer. It could be somebody, you know, a company jumps on a podcast like yours and has a bigger audience. All of a sudden, more people find out about the business and hence that larger audience is able to drive that share price, right? When you understand that, you're understanding what really is the process that drives margin expansion or price earnings expansion or whatever valuation expansion you want to talk about. Why does a company like Expel, like when I found Expel, it was trading about eight times earnings and it was growing over a hundred percent a year.

46:32And yet now it's at$80 plus. And I think it trades around 40 times earnings and it's growing actually slower. So what drove that? Well, everybody knows Expel now, whereas back when I looked at it, nobody really knew it. So understanding that process, I think gives you a massive edge and gives you that opportunity for that size gain. You got to know what triggers these things. You got to know how to determine if it's triggered yet or not. If everybody's talking about a stock, you know, it's discovered and more times than not, you've seen it, right? And more times than not, the stock's probably overpriced.

47:05But if nobody's ever heard, if you go to 20 of your investing friends and say, Hey, have you ever heard ABC? And none of them say yes. That's kind of what gets me excited. One of the things we do is like, when we actually finally decide to talk to management, we usually do a lot of work before we even talk to management. But if I phone a small micro cab and I ask for, you know, it's happened before, I'll phone the receptionist and say, I need to speak to whoever handles your investor relations. And if she has no idea what I just asked her, if she's confused and doesn't know who I'm supposed to talk to, I get excited because that means there's not a lot of people that have phoned that company.

47:37It's things like that that drive our excitement. If all of a sudden she immediately hands me off to an investor relations expert or some outside party or something like that. Then I know that they try to get people to hear about it or they try to get discovery and exposure. And I'm less interested in it. I want to find a company that's not discovered. I want to understand that. And quite frankly, if necessary, I'm going to help that discovery process. I'm going to phone institutional investors. I'm going to phone other investors and say, hey, you got to look at this company. And that's how it starts.

48:09So you mentioned earlier in this interview that with the fact that a lot of the stocks you invest in are illiquid, you have to be right a little bit more often than maybe say investing in larger companies that are more liquid. What would you say your hit rate is like with your strategy? Do you find that your winners are kind of following a power law and then you can find something like Expel that carries the entire portfolio while you have maybe a few other stocks that aren't necessarily losers, but maybe some that just aren't budging. Maybe the discovery process just is taking a little bit longer than you thought, or maybe some of them, maybe you just make a mistake on and lose some money on.

48:46Yeah. So I don't want to say the style or the strategy we use is very conservative inside the micro cab space. There's thousands and thousands of micro cabs. I think we did a check at only about 5 % are actually profitable. So immediately we sort of X out that 95%. So we actually think because we're doing that, our odds of success are significantly higher. And then because we're looking for that undiscovered component as well, we think that we've shrunk that pool of viable businesses even better. And quite frankly, our hit rate is actually quite high. I argue it's probably in the 60, 70 % range, which is, I think if you're hitting 50 % in this business, you're actually doing quite well, but we've hit higher.

49:26But that power law that you talk about still has that impact, right? So our losers might be up 10 or 20%, but we're not in the business to try to get 10 or 20 % wins on these stocks. We're looking for that outsized gain. So our hope is within the pool of companies that we have that 5X or 20X that we might see in three or four years, and we get those. And the thing is, though, as we see those really start to take off, We want to have less of those 10 and 20 % gainers and try to focus more on those Wayne Gretzky's again, like I said. So you do get that. You get an opportunity to see the big winners early.

49:59You get an opportunity to double down on them sooner than others. And that's really where you gain. You're going to get it because you're going to manage that winner properly, as opposed to a diversified portfolio and hope and pray that two are going to be big wins. You want to really double down on the ones that you're seeing have that escape velocity. So looking at the other side of the discovery process is obviously the exit strategy that you have. So you've discussed quite a few little things that you look for when exiting, but what other things other than say things like what, once they get more discovered, so are you looking for things like added institutional ownership, increased analyst coverage?

50:36What exactly are you looking for that's going to trigger you to exit an investment? Yeah. Selling is the hardest thing to do in this business, right? It's easy to sort of pick and choose a few stocks and hope go up. But when it comes time to selling, especially like selling a loser is pretty quick for us, right? Once a thesis breaks down, it has nothing to do with discovery or not. If the thesis breaks down, you know, it's time to head for the exit door. But the things that we look for that start to tell us when a company's fully discovered is like you mentioned, if an analyst starts to cover a company, it goes into a different level of discovery, right?

51:10There's what we call retail discovery and then what we call institutional discovery. So when we start to see a number of analysts covering a stock, that doesn't mean we run for the hills, but it means we're now into that secondary level of discovery. When institutional investors start to participate, that's another level of discovery. When you get that$100 million market cap and you're getting those two things, the analysts and the institution starting to trigger, that's another level of discovery. But then the other one that I've almost joked about is like when you start to see analysts on TV talking about this company, when you start to see institutional investors talking about this company on TV, that discovery process is going to completely run.

51:50Now, we've got a different dynamic in Canada because right now we're just talking about Canadian sort of market, but sometimes these companies continue to grow and they go into the US and then you got that whole different level of almost international discovery because now you started all over again. you've got a bigger pool of retail investors. You've got a bigger institutional pool that might start to look at a company. So again, like Expel, you know, Expel graduated from a Canadian listing to eventually a NASDAQ listing. And all that time that, you know, while it was a Canadian listed company, it never had any analyst coverage.

52:22So, you know, from like pennies to$8 roughly, when it went to NASDAQ, there was no analyst coverage. There was barely any institutional ownership, right? It was bizarre. The minute it got to the US, it just started to get discovered there. And of course it went 10X from that point there. So you have to understand the different phases. You have to understand where it could get caught up and say, okay, that's about, you know, it's never going to go to Nanostack. It's never going to get that US audience. So this is kind of as good as it gets, but I got to be clear that if what you've done is once that discovery process has run its course, now you're just left with the performance of the business.

52:56And while the performance of the business could be enough to still want you to hold the stock. You want both engines driving your returns. You want that discovery process and the fundamentals working because that's when you're getting your maximum output in that share price. So we're looking for all those things, but one by itself doesn't necessarily tell us, okay, it's time to sell. You know, if the company's still growing very rapidly, if it still looks like it's got good runway and there's nothing else that's better, then we're going to still hold that stock. After investing in multi-baggers that you look for for so long, one of the biggest mistakes that Buffett always talks about is mistakes of omission.

53:32So this is things like selling stocks that maybe are still early on in their growth trajectory or just missing something, letting something fall through the cracks. So it sounds like your system is designed very specifically to not allow that to happen. But can you discuss if that has happened or if there's, you know, something that was just looking back seems so obvious, it just smacks you upside the head and you're just like, oh my God, what, how did I miss this? Yeah. So we don't have enough time to cover all the mistakes of native omission. That's a, I mean, I think if you're going to do what we do, if you're going to be in the microcast space, you better get used to the fact you're going to miss a whole bunch of them.

54:12Right. And I remember I had an old mentor that told me one time, It's like fishing, right? At the end of the day, you're trying to catch one big fish and be happy about it. You're not sitting there in a river or lake trying to catch all the fish. You should be happy when you've got one big winner and that's it. You're going to miss so many. Goodness, I've missed so many. I've sold too many big winners early. You just got to get used to that. And if you're fishing in the right spot, you're going to want to hope to have said, okay, I saw that, but I missed it rather than I never saw it. I've had in my hands, like, you know, almost crying about this, but in my hands, I've had probably half a dozen hundred baggers.

54:47Like I've owned these things and sold far too early. That's just the nature of how we sort of the criteria we have will identify them or identify most of them, but it's just impossible to own them all. And it's impossible to time it right. And it's impossible to hold them to the maximum ownership, right? These are just, you just got to get used to the fact that's going to happen. Like you're not going to, again, I'll use a hockey analogy. You're not going to hit every shot and score every shot. You just got to keep taking shots and hope that the odd one gets in. Yeah. It seems like, you know, making those mistakes of omission is part of the investing process.

55:21And you basically just have to accept that it's a price that you pay for success. Absolutely. Because we know every stock in Canada, right? We've looked at every stock. We have to know that we're going to miss something. That's just, that's what's going to happen. So other than, than expel, what are some of the biggest winners in terms of returns that you've ever invested in? Obviously, aside from these half dozen hundred beggars that you let go early, although maybe some of those probably were ones that, that were big winners for you. Well, okay. So Bowflex was a big win. I mean, I can't say no to 10, 12 X return.

55:56That was a good size win and it was early. So that, that was really helpful, but there, there's a lot of micro caps that people have probably never heard of that are like, they were 10 Xers for me. And I was able to compound a lot of these things. So, you know, a company called Sanko Tech was a 10 X. Nobody's ever heard of that still. Hamilton Thorne, which is now quite institutionally owned, and is a great example of discovery process. That was a 15 X for us. So that was a sizable one. So Bowflex, Medifast was a US listed company. That's one of those hundred baggers that slipped through my fingers.

56:27We were buying it in the 20 cent level. I think after splits, that's become a hundred dollar plus stock. Oh my gosh. There's so many of these 10, 20 baggers that we have that are still kind of unknown. We recently had one called Inventronics that's turned into a 10 bagger for us. I can give you a massive list. There's a lot of these things, but they're still relatively unknown. These micro caps that turn into slightly bigger micro caps, but are 10, 20 times our original night. So you mentioned in another interview about Expel being an American company that listed in Canada because it wanted to take advantage of going public over raising capital from venture capital.

57:07How do you see the VC market shaping in the last few years in relation to smaller businesses looking to raise capital both in the US and in Canada? Are there still businesses like Expel that are US-based listing in Canada or has that kind of ship sailed? So I actually have done work with the TSX Venture Exchange and have gone to the US and presented on behalf of the exchange to try to encourage more and more companies to do this. Yes, there's more and more companies that are looking at Canada and the Canadian exchanges for their capital requirements. You know, the venture capital market, the US and even in Canada, they're really trying to find that one outlier, that unicorn, you know, that company that is going to be that power driver of their portfolio.

57:51you know the next uber and linkedin and whatnot and so if a company looks like they're just going to be an average business they don't have the same access to capital that a company would if they if they took that average business and try to list up in canada so i think more and more people are starting to understand that we're starting to see more u.s companies that come and list up here like i mentioned another you know another big winner for us was hamilton thorn well hamilton thorn is a boston-based business that listed up here in canada we're seeing a number of others like that that are seeing the opportunity to access capital up here at an earlier stage in some cases.

58:23And the venture capital market or the microcap market in Canada is a viable opportunity for some of these businesses to get capital that they need to grow. And it's structured so that they can sort of do it in a more cost-effective way than a lot of other opportunities. So yeah, I think we're seeing it. And I think we'll continue to see not just US listed companies, but international companies that are coming up here and listing and going through all the trials and tribulations that Canadian companies do when they're startups and at this stage as a public company. Can you name any interesting companies that you've recently invested in or that are maybe on the Cedar that are starting to interest you?

59:04Anything new? I mean, there's always something. We're not fad chasers, right? So we miss a lot of the big bubbles and stuff like that. But surprisingly, like cannabis is a great example right now. We completely miss the cannabis craze because we're driven by fundamentals, right? And there was no fundamentals to get us excited. But now it's come full circle. And surprisingly, we're starting to see some cannabis names that are starting to turn profitable and are kind of, we think, significantly mispriced, misunderstood, and almost hated because they're in that industry. So there's a company called CanadaBus Capital.

59:38I mean, they've got some of the strangest names of that industry, but CanadaBus Capital is one we really like. There's one called Grown Row. That's actually a US-based company that's come up here in Canada and like we just talked about, listed up here. These are two companies we're looking at right now because they fill our sort of fundamental criteria. They've got the inflection point. But here's the thing. Nobody knows these guys. I actually had lunch with a cannabis analyst two weeks ago, three weeks ago. and he'd never heard of these two companies, right? So the discovery process kind of really kicked in when I heard that, right?

1:00:12So you've got these two companies that are profitable and growing nicely, very unloved the sector that they're in and very unknown. So kind of hit a lot of the things we're looking for. So there's that. There's a company that I recently joined the board of that sort of fit all the criteria. I won't mention the name as there's a bit of a conflict there, but there's a number of different companies that we're finding. gosh, Hammond Power, Hammond Manufacturing. These are two names that have done exceedingly well. Those are companies that we've been following now for a while. Yeah. I mean, it's almost like you ask me next week, I'll have a few more names.

1:00:45There's always something that gets us interested enough to start looking. We do have a new name that we're looking at right now. Again, they meet the criteria we look for. They start to trigger that. Or if we see that inflection point, we get excited about and off we go. There's lots out there. There's lots out there. Paul, thank you so much for joining me today. Before we close out the episode, where can the audience connect with you and learn more about you? Well, thank you, Kyle. First off, I want to really appreciate the time that you've given me. If anybody's interested in talking to me, they can find me on Twitter at PaulAndriola.

1:01:16They can check out our website at smallcatdiscoveries.com. And yeah, I mean, it's easy. Track me down. Google search me. You'll find all sorts of different ways to connect with me. But our website, or even if you want to reach out to me via email, It's at paulatbrizio.com. So hopefully that gives everybody enough opportunity to track me down.

1:02:03Thank you.