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Any advice on getting into Value investors club and microcap club


Denistry
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I applied to VIC thrice last year, the first was a medical equipment with basically a monopoly in the niche (returns: around 400% since then), the second was a net net (returns: only around 10%), the third was a turnaround (returns: around 200% when i sold it), but all of them got rejected. I would very much appreciate some advice from people who managed to get in, since VIC doesn't give any feedback on the pitch. Just wanted to know what are the criteria that VIC looks for and advice on how to get in. I am also interested in microcap club, so any advice on getting into that is much appreciated as well.

 

 

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as someone who is in VIC - my advice is this - read thru 15-20 of the pitches from the 3 months old period - get a feel for the style and what sectors / themes are in vogue - it's impossible to judge performance ex ante so they just go by whether your idea "fits in" so to speak - so my advice is try to goal seek for what is popular on the site

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That is really good advice. Thanks! I know this may be a long shot, but do you happen to know if certain investment styles are favoured in VIC? for example, perhaps turnarounds are not as favoured as companies with an economic moat. At least this is the vibe that I am getting from reading past posts, I may be wrong.

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Yea, that is what I gathered as well. What about cap size & primary research? I am more of a micro/small cap guy, and my capacity to do primary research is limited (as I am not based in the States right now), but I do try my best to get in touch with professionals working in the field I invest in via emails and such (I also talk to management in most cases).

 

Also, I know that they are both important, but which is more important? Quality of write up or type of investment idea? This has baffled me for quite a while tbh

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I agree that performance has nothing to do wether a pitch is selected or not. I suggest plentiful dropping of hedge fund key words like misunderstood, transformation, masked, free cash flow,, hidden, catalyst, investor base, capital allocation etc. to make it last the reviews, based on what I am reading. FWIW, I don’t think the quality of most pitches is very high in VIC, but I still like it as a resource to obtain ideas.

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I agree with your statement. However, I think that the reason why there seem to be alot of these hedgefund buzzwords is because alot of the contributors are from hedgefunds , so naturally it manifests in their pitches. I feel that the most tangible benefit I get from reading the pitches are the primary research that are done, which would be difficult for retail investors like me to perform, though there is no way to verify whether the truth behind their research & what methodology is used in gathering information.

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Advice above is solid. Content doesn't matter as much as "cultural fit" to use a SV term.

 

I've tried and been denied.  The best idea I submitted doubled a month or two later.  It was a special situation but too small.

 

What value are you looking to get out of VIC? I know a few contributors who just dump junk on there to stay active.  There are a lot of hedge fund hotels posted too.

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This thread has been really informative and I am really grateful for the great advices. Thanks people! and also, Hi oddballstocks, I recently read your book, the bank investor's handbook, great book man, continue with the good work.

 

I figured that there is no way of describing my motivations / why I want to get into VIC without sounding arrogant, so here's my background.

 

I am currently in my junior year in college, majoring in systems engineering (mainly dealing with statistics, simulation & supply chain). I first started investing around 3 to 4 years ago when I was in the military, wondering about what to do with my life, and I really enjoyed investing, so I decided that I want to do that, preferably for the rest of my life. I talked to an up and coming hedgefund manager back then who was helpful enough to let me know what to do going forward and he told me about VIC, and that its a highly coveted place to be in if you're a value investor, so naturally I saw it as the place that I want to get into eventually. Over the next 3 years, I studied finance on my own, while studying for CFA on the side, while working on the weekends and writing for seeking alpha sometimes (poor college kid, lol) and as those of you with an engineering degree might know, surviving through an engineering degree is not exactly a walk in the park.

In essence, I initially wanted to get in because I wanted to prove to myself that I can be a good investor without a "formal" finance background, and also I treat it as a milestone for myself. Eventually I got some pretty good returns and I started thinking that I could actually get into VIC, but I just kept getting rejected, despite spending quite a lot of effort with each pitch. I thought that perhaps my pitch was the problem (of course, that might be the problem, but we will never know), and I was really disturbed by it. But at least now I know that there are so many nuances to getting in and I am starting to feel relief that it might not be a problem with my investment style or pitch.

 

 

So thanks guys for letting me know all these, I truly appreciate it. I should had came here to ask this a long time ago.

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Guest cherzeca

don't forget that you have to do 2 write-ups a year to stay in.  that was my problem, after a couple of years I ran dry of pitches that I was interested enough in to write up. 

 

to repeat some of what was said, identifying a near term catalyst is a big plus.  also there is a lot of microcap write-ups on VIC which I am guessing VIC is trying to deemphasize so that won't help you if that is what your next pitch is.

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Sub $100M market cap is too small.  I'd think sweet spot $100M to 2B.  Key is to have some sort of differentiated view/info and not just "it's cheap".  If it reads like a sell side research report I doubt they will be impressed. 

 

For instance, maybe there is a division that's crushing it, worth more than the EV, but it's being masked by the rest of the shitty business? 

 

In reality, I'm sure they just reject most applicants these days.  I wouldn't take it personally.  Keep on trying.

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The strategy to get into microcapclub is pretty simple imo. Bring some unique research to demonstrate that you have put more effort than just summarizing publicly available information. The most obvious example would be insights, stories, or other tidbits learned from discussions with the CEO/CFO that give glimpses into what is going on at the company that might not be obvious from just reading the filings. Add a personal touch to the write up, it seems to be received well. Macro and industry projections/forecasts and TAM arguments are normally not received that well. I've never applied to VIC as I don't see the point/benefit of being a member there, way too much junk. Its also more focused on large cap names which don't interest me when I play mostly in Nanocap/Microcap names.

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VIC is an incredible resource - I find those that haven't gotten in are just justifying reasons.  Sure your name doubled - does it seem reasonable that they are only going to filter and select companies that double in a year? 

 

I got in with a sub $50mm market cap in the past year.  It's doable - it just takes time and dedication.  I had submitted a few ideas prior that were rejected - one was a 3x and one was +35% in a year.  Instead of complaining I kept submitting ideas and got in. 

 

Sorry for being terse but I would encourage you to spend time trying to get in if it's something you're interested in. Don't listen to other people. 

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I've tried VIC twice and have given up since then.

I am an independent operator now and don't want to be affected by any group thinking.

It is always dangerous to follow any herd, including the herd in VIC.  :)

What really matters most for your performance is:

1. Independent research by yourself.

2. Assume full responsibility for failure.

3. Have supreme confidence in your own ability to make money.

 

With that said, I also would like to know the combined average performance of all VIC articles. If the combined performance is not significantly beating the market, then the chances are low for an individual to read through those pitches and pick ones that outperform the market. If he can, then he doesn't need VIC. If he can't, then he also doesn't need VIC.

 

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I've tried VIC twice and have given up since then.

I am an independent operator now and don't want to be affected by any group thinking.

It is always dangerous to follow any herd, including the herd in VIC.  :)

What really matters most for your performance is:

1. Independent research by yourself.

2. Assume full responsibility for failure.

3. Have supreme confidence in your own ability to make money.

 

With that said, I also would like to know the combined average performance of all VIC articles. If the combined performance is not significantly beating the market, then the chances are low for an individual to read through those pitches and pick ones that outperform the market. If he can, then he doesn't need VIC. If he can't, then he also doesn't need VIC.

 

Wouldn't this same logic apply to cobf?  VIC can be used as a source for ideas just like anything else.  I've found the comments, message boards, network to be immensely valuable. 

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I am an independent operator now and don't want to be affected by any group thinking.

It is always dangerous to follow any herd, including the herd in VIC.  :)

What really matters most for your performance is:

1. Independent research by yourself.

2. Assume full responsibility for failure.

3. Have supreme confidence in your own ability to make money.

 

 

+1

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VIC is a great resource and the discussions are IMO more valuable than the write ups. You have other incredibly bright minds that can all interpret new data on the fly and give you a pretty well rounded idea of were "the market" consensus is.

 

Honestly never heard or used the other site.

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I've tried VIC twice and have given up since then.

I am an independent operator now and don't want to be affected by any group thinking.

It is always dangerous to follow any herd, including the herd in VIC.  :)

What really matters most for your performance is:

1. Independent research by yourself.

2. Assume full responsibility for failure.

3. Have supreme confidence in your own ability to make money.

 

With that said, I also would like to know the combined average performance of all VIC articles. If the combined performance is not significantly beating the market, then the chances are low for an individual to read through those pitches and pick ones that outperform the market. If he can, then he doesn't need VIC. If he can't, then he also doesn't need VIC.

 

Wouldn't this same logic apply to cobf?  VIC can be used as a source for ideas just like anything else.  I've found the comments, message boards, network to be immensely valuable.

 

I agree.  CoBF, blogs, VIC, etc. are places to start, and sometimes good comments/discussions can correct errors in your thinking and point out risks you may have overlooked.

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I've tried VIC twice and have given up since then.

I am an independent operator now and don't want to be affected by any group thinking.

It is always dangerous to follow any herd, including the herd in VIC.  :)

What really matters most for your performance is:

1. Independent research by yourself.

2. Assume full responsibility for failure.

3. Have supreme confidence in your own ability to make money.

 

With that said, I also would like to know the combined average performance of all VIC articles. If the combined performance is not significantly beating the market, then the chances are low for an individual to read through those pitches and pick ones that outperform the market. If he can, then he doesn't need VIC. If he can't, then he also doesn't need VIC.

 

Wouldn't this same logic apply to cobf?  VIC can be used as a source for ideas just like anything else.  I've found the comments, message boards, network to be immensely valuable.

 

I agree.  CoBF, blogs, VIC, etc. are places to start, and sometimes good comments/discussions can correct errors in your thinking and point out risks you may have overlooked.

 

 

I agree that discussions has helped correct lots of my errors. Tbh, I feel that sometimes the most valuable aspect of VIC is the discussions below the pitch rather than the pitch itself. I am still going to try getting into VIC eventually, but I am probably going to polish my skills first.

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I've tried VIC twice and have given up since then.

I am an independent operator now and don't want to be affected by any group thinking.

It is always dangerous to follow any herd, including the herd in VIC.  :)

What really matters most for your performance is:

1. Independent research by yourself.

2. Assume full responsibility for failure.

3. Have supreme confidence in your own ability to make money.

 

With that said, I also would like to know the combined average performance of all VIC articles. If the combined performance is not significantly beating the market, then the chances are low for an individual to read through those pitches and pick ones that outperform the market. If he can, then he doesn't need VIC. If he can't, then he also doesn't need VIC.

 

this is a study using data taken from VIC back in the day. It talks about the overall performance of VIC members, do take a look at it.

https://www.ivey.uwo.ca/cmsmedia/3775537/fundamental_value_investors_characteristics_and_performance.pdf

 

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I've tried VIC twice and have given up since then.

I am an independent operator now and don't want to be affected by any group thinking.

It is always dangerous to follow any herd, including the herd in VIC.  :)

What really matters most for your performance is:

1. Independent research by yourself.

2. Assume full responsibility for failure.

3. Have supreme confidence in your own ability to make money.

 

With that said, I also would like to know the combined average performance of all VIC articles. If the combined performance is not significantly beating the market, then the chances are low for an individual to read through those pitches and pick ones that outperform the market. If he can, then he doesn't need VIC. If he can't, then he also doesn't need VIC.

 

Wouldn't this same logic apply to cobf?  VIC can be used as a source for ideas just like anything else.  I've found the comments, message boards, network to be immensely valuable.

 

I agree.  CoBF, blogs, VIC, etc. are places to start, and sometimes good comments/discussions can correct errors in your thinking and point out risks you may have overlooked.

 

I used to heavily rely on CoBF but not anymore. I found that the best picks are usually not discussed anywhere. SMLR for example. If I like a stock and it is not discussed in CoBF, seekingAlpha, or VIC, that's a big plus. The biggest red flag is when i like a stock but CoBF already has a 100+ page discussion about it. Those picks usually fail spectacularly.  :(

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I've tried VIC twice and have given up since then.

I am an independent operator now and don't want to be affected by any group thinking.

It is always dangerous to follow any herd, including the herd in VIC.  :)

What really matters most for your performance is:

1. Independent research by yourself.

2. Assume full responsibility for failure.

3. Have supreme confidence in your own ability to make money.

 

With that said, I also would like to know the combined average performance of all VIC articles. If the combined performance is not significantly beating the market, then the chances are low for an individual to read through those pitches and pick ones that outperform the market. If he can, then he doesn't need VIC. If he can't, then he also doesn't need VIC.

 

Wouldn't this same logic apply to cobf?  VIC can be used as a source for ideas just like anything else.  I've found the comments, message boards, network to be immensely valuable.

 

I agree.  CoBF, blogs, VIC, etc. are places to start, and sometimes good comments/discussions can correct errors in your thinking and point out risks you may have overlooked.

 

I used to heavily rely on CoBF but not anymore. I found that the best picks are usually not discussed anywhere. SMLR for example. If I like a stock and it is not discussed in CoBF, seekingAlpha, or VIC, that's a big plus. The biggest red flag is when i like a stock but CoBF already has a 100+ page discussion about it. Those picks usually fail spectacularly.  :(

 

Anecdotal. 

 

- Some stocks that aren't discussed do well.  Some don't.

- Some stocks discussed on VIC and COBF do well.  Some don't. 

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Agree with the advice posted here on finding something misunderstood with a catalyst.  You probably won't get in without identifying a catalyst or something very unique. 

 

Try to write something up that has not been posted before. It might be okay if the most recent writeup is years old.

 

Avoid microcaps and international ideas.  Short ideas might be the way to go with stock mkts at all time highs.

 

The subsequent performance of the idea shouldn't matter.  You can get accepted very quickly if the idea is good enough.  Go read some of the highest rated ideas for guidance.

 

 

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