Inflection points can serve as triggers for you to invest in particular stocks right before the meat of their growth cycles or at a time when they’ve improved their risk profiles for various reasons. I’ve found that the identification of inflection points has helped me pinpoint companies that tend to become acquisition targets. Of over 40 stocks that have been both the focus of our research AND acquired, some of these acquisitions were actually predicted by my team; others were just a byproduct of what happens when good research is rewarded.

1. Maj Soueidan
Founder GeoInvesting
@GeoInvesting
@MajGeoInvesting
maj@geoinvesting.com
with
Siegfried Eggert
Equity Analyst, GeoInvesting
@GeoInvesting
@SGEggert
Siegfried.eggert@geoinvesting.com

2. What We Do
• Help micro-cap investors gain a competitive advantage in an increasingly
challenging investing environment.
• Educate
• Find undiscovered opportunities, long and short
• Perform time-intensive research
• Subscriber Network
• Executive Cast
• Institutional Research
Oct 2016 Microcap Conference Philadelphia

3. What we have done
• Built two affiliated Hedge Funds around our research: Market’s Edge,
FG Alpha
• In 10 years we uncovered over 50 multibaggers and
dozens of China Frauds
• Over 10 years featured in Financial Media
• Current team: 2 Partner, 7 Analysts, 2 Trader,
3 Marketing & Administration,
5 on-the-ground researcher in China
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4. Playing Field Has Shifted
 Microcap Attrition
 Institutions
 Brokers
 Retail investor
 Holding period: from years pre-
2008 to days now.
Oct 2016 Microcap Conference Philadelphia

5. Playing Field Has Shifted
Oct 2016 Microcap Conference Philadelphia

6. Playing Field Has Shifted
 Pre-2008 the retail investor accounted
for 2/3 of trading volume. Now,
program trading accounts for 2/3 of
trading volume.
(Sources: https://en.wikipedia.org, http://etfreference.com/)
Oct 2016 Microcap Conference Philadelphia

7. Playing Field Has Shifted
 Holding Period has dramatically
decreased
0
10
20
30
40
50
60
70
80
90
100
1960s 1970s 1980s 1990s 2000s Now
Average Holding Period in Months
Oct 2016 Microcap Conference Philadelphia

8. Find Near/Medium-Term Baggers
• Look for inflection points before others
process them to get a first mover advantage
• Find stocks before they:
• enter a growth cycle
• built a competitive moat
• improve risk profile
• get acquired
Oct 2016 Microcap Conference Philadelphia

9. Advantages
• Less market exposure risk in much more
volatile times
• Less business risk that longer term investing
can expose you to
Oct 2016 Microcap Conference Philadelphia

10. Monster Beverage Corp
Oct 2016 Microcap Conference Philadelphia

11. Mega-Baggers I Sold Too Early
• MNST- Locked in 100% in few months in 2004
– Current Return- 16,800%
– Inflection Catalyst- New Product
• CHTR- Locked in 77% in two years in 2012
– Current Return- 709%
• PATK- Locked in 61% in 6 Months in 2012
– Current Return- 1100%
Oct 2016 Microcap Conference Philadelphia

12. Multi-Bagger Round Trip Busts
• WTT - Locked in Multi-bagger returns in 1990s in few
months
– Down 87% since then
• TAC - Locked in Multi-bagger in 1990s
– Out of business
• ALGI -Locked in Multi-Bagger in few Months in 1997/98
when stock went from $13.00 to over $100.
– Basically out of business
• PFHO - Locked in 1800% on half my position by time
shares hit $73.00. Sold rest by time was back to $11.
Oct 2016 Microcap Conference Philadelphia

13. NYSE Study
• 4,229 companies
in total
• 31 at least
doubled in the
last 6 months
• 82 companies
(2%) at least
doubled during
last year
Double, 59
Triple, 15
Quadruple,
4
Six-
bagger, 3
ten-
bagger, 1
NYSE’s 12-months
Multibaggers
Oct 2016 Microcap Conference Philadelphia

14. OTC Study
• 22,282 OTC
companies,
11,263 with a
market cap over
$2m
• Of the 11,263
companies, 222
(2%) at least
doubled over the
last 12 months
Double, 98
Triple, 39
Quadruple,
50
Six-bagger,
19
ten-bagger,
16
OTC 12-months Multibaggers
Oct 2016 Microcap Conference Philadelphia

15. OTC Return Study
• North American Companies that 5 folded in 3
years (if picked at low): 945
• North American Companies that 11 folded in 5
years (if picked at low): 582
• North American Companies that 101 folded in
10 years (if picked at low): 129
Oct 2016 Microcap Conference Philadelphia

16. Challenges of Inflection Point Investing
• Time and work load are intense
• You need a good understanding of the business to understand impacts
– follow many businesses for a long time
• Strong Selling Strategy
• Strong understanding of intrinsic value
• Inflection point might not be recognized by the market for an extended
period of time
Oct 2016 Microcap Conference Philadelphia

17. How we implement it
• Don’t get obsessed about one company
• Turn many rocks and keep following companies
• Average up as conviction grows and prepare for a rollercoaster ride
• Strong sell discipline and definition of intrinsic value
• Define time horizon for investment thesis, precommit
Oct 2016 Microcap Conference Philadelphia

18. How we implement it
• Catalysts are reinforced through research publication – research
activism
• Make post mortem before initiating investment
• Do the Due Diligence: Interview management, suppliers, employees,
customers, competitors, industry experts, etc.
• Be patient and be prepared for opportunities
Oct 2016 Microcap Conference Philadelphia

19. Thank you!
www.geoinvesting.com
maj@geoinvesting.com
siegfried.eggert@geoinvesting.com