Chris Lahiji is the founder and president of LD Micro, which is an investment newsletter firm that focuses on finding undervalued companies in the micro-cap space. Since 2002, the firm has published reports on select companies throughout the year. LD Micro concentrates on researching and investing in companies that are often overlooked by institutional investors. The firm also hosts the LD Micro "Invitational" and LD Micro "Main Event" Micro-Cap Growth Conferences for investors in June and December of each year, respectively. It is a non-registered investment advisor. In this Wall Street View, our host spoke with Chris Lahiji, LD Micro, at Singular Research's 9th Annual "Best of the Uncovereds" Conference 2014 in Bel Air, CA.
Mr. Lahiji begins by delving into his opinion on what’s going on in the microcap space, “It’s been an interesting year, and by interesting I mean not that great. So there’s a lot of companies over the last few years that had pretty big runs up and there’s a lot of companies that have kind of, you know not participated at all and I don’t want to say it’s fatigue, but I just feel like people aren’t getting deals that they feel like they deserve. I can only speak for myself and everyone’s ultimately entitled to their opinion but my take is that I am just not finding great companies at great valuations. Now don’t get me wrong, there’s a lot of fantastic phenomenal companies out there that are profitable, it’s just that I’m paying a lot more in terms of valuation to own them.”
He believes that what’s happening in the microcap space is that, “private companies are realizing that the benefit of going public is not there, it costs way too much damn money to ultimately operate a public company, there’s a lot of red tape, and why go public when your valuation as a private, you know ‘mystery company’, is worth a hell of a lot more. So these guys are just basically making companies to sell to larger players.” Mr. Lahiji believes that there must be fundamental changes for this problem to go away. One of the major changes must be to give companies incentives to go public, such as the government reducing red tape and creating tax incentives. For more information, check out their website at www.ldmicro.com
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