Intro

In this episode of the Planet MicroCap Podcast, we dive into the Diamond Hill Micro Cap Strategy with Aaron Monroe, Tyler Ventura, and John Loesch to break down how they’re finding alpha in one of the most underfollowed parts of the market. With a concentrated, long-term approach and a “three heads are better than one” framework, they focus on simple, durable businesses with strong balance sheets and aligned management.

We dig into why illiquidity and lack of coverage are features—not bugs—in microcaps, how they build positions through their “graduation model,” and why “boring but beautiful” companies can quietly compound capital over time. We mention several companies and sectors during this conversation, and I’m not a shareholder in any of them.

For more information about Diamond Hill MicroCap Strategy, please visit: https://www.diamond-hill.com/investment-strategies/us-equity/micro-cap/separate-account/

Chapters: 

00:00 Introduction to the Diamond Hill Microcap Team
02:31 Investor Origin Stories
07:59 Investment Philosophy in Micro Cap
12:01 Exploiting Market Inefficiencies
16:23 Identifying Misunderstood Micro Caps
22:35 Ideal Investment Setup
27:04 Managing Group Think in Investment Decisions
28:28 Understanding Conviction in Investment Strategies
31:08 Evaluating Management in Micro Cap Companies
34:03 Identifying Change Agents in Management
38:12 Structural Market Insights and Opportunities
42:27 Behavioral Changes in Investing
46:51 Position Sizing and Risk Management
51:47 Lessons Learned from Micro Cap Investing
57:11 Building a Sustainable Edge in Micro Cap Investing

Planet Microcap hosts the highest quality in-person microcap events in North America. The mission is to bring the best microcap investors, companies, and allocators together to gather, connect, and grow.; visit https://planetmicrocap.com/ to learn more about our Las Vegas and Toronto events.

This presentation is for informational purposes only and should not be construed as a recommendation to purchase or sell any security referenced herein. Planet MicroCap Holdings LLC and MicroCapClub LLC (collectively, “we” or “our”) are not licensed brokers nor registered investment advisors. We, our partners, contractors, members, subscribers, guests, or affiliates may or may not hold positions in one or more of the securities mentioned in this presentation and may trade in such securities at any time. We may have received cash compensation from one or more participants for presenting at past, present, or future events. We recommend you consult a licensed investment adviser, broker, or legal counsel before purchasing or selling any securities referenced in this presentation.