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Jason and Gary Head West to Meet with Portfolio Companies

Every March, Jason and I head West to Dana Point, California to participate in the annual Roth Capital Partners Conference. More than 500 companies come to the conference, hosted by the investment bank, to speak in groups and one-on-one with portfolio managers to discuss their investment merits. While it’s a lot of travel for just 3 days, we think it’s more than worth it. Over the years, we have discovered many great investment opportunities and have been able to check-up on current portfolio holdings!

Before going to the conference, Jason evaluates each of the 500 companies and identifies any worth checking out. This year he identified 12 companies. From there, Jason and I took a deep dive on those prospects, eliminating all but one company remaining or 0.2% of attending companies! The reason I mention this is to show just how difficult it is to meet our investment criteria. We are looking for stocks that offer the ability to significantly appreciate over the next 3 - 5 years, but come with a significant margin of safety – not an easy feat, but a discipline that has served us well over the years!

As many of you know, I have been in the investment business for more than 35 years with a major focus on investing in small publicly traded companies. In that time, I have built a network of portfolio managers that have the same investment philosophy as I do. A lot of them come to the conference and we have the opportunity to discuss and challenge each other’s ideas and get a sense for the small-cap business climate. From speaking with my network, it seems like the theme continues to be “patience.” While our portfolios have done relatively well, it has been one of the toughest 10-year period for small-cap stocks since the 1930’s. That being said, this is where we see opportunity. History tells us that periods of underperformance are typically followed by long periods of over-performance. Our day in the sun is coming! In the meantime, we are hunkered down focused on our investment discipline patiently awaiting our portfolio companies to shine! If you haven’t already see our quick video on the conference, you can view it here

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