Compounders Podcast The Enduring Appeal of Smaller Cap Stocks with Vishal Mishra and Michael Demaray of Bard Associates
Oct 30, 2025
Vishal Mishra, a small-company value researcher at Bard Associates, and Michael Demaray, lead manager of Bard’s small- and micro-cap strategies, discuss investing in overlooked microcap stocks. They cover Bard’s long small-cap focus, why tiny floats cause wild volatility, how they size and hold positions, sourcing liquidity, and what traits make a company a potential long-term compounder.
AI Snips
Chapters
Transcript
Episode notes
Favor Asset Light Software And Avoid Biotech And Cyclicals
- Prefer asset-light software and avoid biotech, deep cyclicals, financials, and commodity‑sensitive businesses you don't understand.
- Sector selection helps reduce volatility and balance-sheet complexity in microcap portfolios.
Volatility Reflects Liquidity, Not Always Fundamentals
- Microcap volatility often reflects illiquidity and stampedes, not fundamentals; Bard uses diversification and client trust to withstand swings.
- They sometimes sit out sharp up-moves to reassess whether to stay or sell into strength.
Acquirers Provide A Hidden Exit Route With Strong IRRs
- Strategic acquirers still recognize value in microcaps; Bard tracked ~120 takeovers in 22 years with average IRRs ~25%.
- Takeovers are common and can produce strong realized returns despite public-market neglect.