Expert Help - InvestED: The Rule #1 Investing Podcast Recap

Podcast: InvestED: The Rule #1 Investing Podcast

Published: 2024-07-24

Duration: 37 min

Summary

Phil and Danielle Town explore the value of expert networks in investing, focusing on how these resources can aid small investors in understanding niche markets.

What Happened

Phil and Danielle Town discuss the challenges and opportunities in analyzing small businesses, particularly microcaps, which are often overlooked by professional analysts. They reference Warren Buffett's advice to invest in microcaps for potentially high returns, as these companies are typically under the radar of large funds. The conversation highlights the importance of knowing what you're looking at when investing in these smaller companies and the difficulty in obtaining reliable information.

They explore the use of expert networks as a means to gain insights into obscure industries. These networks connect investors with field experts, providing valuable information that might not be easily accessible elsewhere. The discussion covers the costs associated with these networks, which can range from $500 to several thousand dollars per hour.

Phil shares his past experiences with the Small Business Association's SCORE program, which offers free mentoring from retired business professionals. He notes that while the program is free, the expertise of the mentors can be hit or miss.

Danielle introduces TEGUS and Knowledge Ridge Expert as notable expert networks, highlighting their popularity among funds willing to pay for specialized insights. She explains how these networks can provide a primer into specific industries, helping investors conduct further research.

The episode also mentions the use of Bloomberg terminals by funds, which include an expert network as part of the subscription. Phil and Danielle discuss the balance between free resources like SCORE and paid expert networks, considering the needs of small investors.

Phil plans to explore SCORE further to evaluate its current usefulness and accessibility for small investors. Danielle expresses interest in testing an expert network to see what value it might provide, particularly in niche industries.

They touch on the potential for expert networks to offer industry insights rather than direct investment advice, emphasizing the importance of understanding the broader market context when evaluating a company.

Key Insights

• Microcap companies, often overlooked by large funds, present potential high returns for investors willing to navigate the challenges of limited available information.
• Expert networks like TEGUS and Knowledge Ridge Expert provide investors with specialized industry insights, with costs ranging from $500 to several thousand dollars per hour.
• The Small Business Association's SCORE program offers free mentoring from retired business professionals, though the quality of expertise can vary.
• Bloomberg terminals include an expert network feature as part of their subscription, offering industry insights to funds alongside their financial data services.