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When you hear the term "moonshot," the first thing that comes to mind might be high-risk, high-reward lottery ticket stocks—those with bold promises of flying cars, miracle cures, or space tourism. But at Microcap Moonshots, the definition takes on a smarter, more calculated meaning.
I've been thinking lately that calling this publication "Microcap Moonshots" might have been a bad idea.
When you hear "moonshot," you probably think of those lottery ticket stocks.
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You know the type – the story stock about some revolutionary product that's going to change the world.
Flying cars, miracle cures, space tourism... you name it.
But moonshots in my book means something different.
Its about investing in stocks that can 2x, 3x or even 10x your investment over a short time.
These are rarely flying car or quantum computing stocks (though they can be)
But to savvy investors willing to look, they scream “buy, buy, buy!” from the mountaintop in ways few other stocks do.
But to find them, you must look.
Which few Wall Street firms do. After all, they generate more in commissions trading in and out of NVDA than they do in the entire small cap sector put together.
So what’s my secret sauce?
The stocks I recommend must rank high on my holy triumvirate of Microcap Moonshot investing:
The QVM (Quality, Value, and Momentum) framework offers a disciplined approach that integrates three key pillars of successful investing.
Each factor is then ranked on a scale of 1 to 100. I only recommend a stock if it ranks overall at least an average of 98/100.
Taken together, QVM strategies outperform the broader market over time by systematically targeting factors that drive excess returns.
It’s like having all your investment ducks lined up in a row.
I spend my days sifting through over 3,000 stocks
And let me tell you, it's not easy finding ones that meet our strict QVM criteria.
Consider that…
But when we do?
It pays off.
Take Power Solutions International (PSIX) for example.
I recommended stock back in on July 30th, trading at $14.14. Fast forward less than six months, it trades at $35.05 and we're looking at gains of 148%.
Not too shabby, right?
(In case you’re wondering, NVDA is up just 8.36% over the same period)
Is PSIX the next big tech darling out of Silicon Valley?
Hardly.
It's a Chicago company that makes…. drumroll please… power systems.
How about another Chicago stock - Oppfi (OPFI) – a community bank tech platform-up 132% since August 26th, 2024?
Or Pittsburgh-based Limbach Holdings (LMB)- up 122%-since we first recommended this pipe and electrical play on April 22nd.
I know, try to contain your excitement.
I’m not claiming I can spot the next 25 Amazons or Netflixes.
I'm smart enough not to do anything so dumb.
What I am good at, though, is sniffing out BS.
And believe me, there's plenty of it in the microcap world.
Now, maybe you prefer the thrill of chasing those "lottery ticket" stocks.
That's fine – “different strokes for different folks.”
There are plenty of other analysts- including some on Substack- that do just that.
Me? I'm all about jumping over small, pridectable hurdles
Chalk it up to my legal background if you want.
But I'd rather not swing for the fences on every pitch that looks good at first glance.
(Fun fact- the late Charlie Munger’s law firm offered me a job straight out of Harvard Law School. “Birds of a feather, flock together.”)
Look, investing in even the best stocks can be a psychological rollercoaster when they drop 30% or more.
(PSIX did just that!)
So why would I want to risk my hard-earned money on flimsy story stocks?
It might not be exciting, but it sure helps you sleep better at night.
And in the end, it also makes you more money.
