Cameron on Penny Stocks Today: Beyond the Wolf of Wall Street (Common Sense Investing)

00:00:06.92
David Barbato
Okay. One, two, three. Today's guest is Cameron, the voice behind the Common Sense Investing Substack and a passionate penny stock investor.

00:00:20.10
David Barbato
His journey started at just 14 when his father took him to the bank to buy his first stock, back in the days of paper certificates. Years later, a wild ride in a tiny company that went up 20x before crashing pulled him deep into the world of penny stocks.

00:00:37.71
David Barbato
Since then, Cameron has dedicated himself to navigating the volatility of small stocks, sharing the lessons, risks, and opportunities with his readers. In this conversation, we'll dig into how he spots hidden gems, avoids common traps, and why microcap investing, despite its chaos, keeps him hooked.

00:00:57.73
David Barbato
Yeah. So Cameron, i'm I'm so glad to have you on and let's jump right into the questions. The first question I have for you is when people think of penny stocks, they often picture the Wolf of Wall Street, right?

00:01:12.40
David Barbato
So how is the reality of penny stock investing different today?

00:01:18.44
Cameron
So here's the thing is that what you see in movies and you see in like social media for that type of thing. It's true. It's true. It still exists today. The Wolf of Wall Street still exists today.

00:01:30.24
Cameron
um There are still penny stock scams. There are still penny stock promoters. There are still these companies that they're selling you that are garbage that are going up in share price in some form of pump and dump and then and dropping back down.

00:01:43.96
Cameron
I think what has really changed is the fact that you have to realize that two things can exist at the same time and both can be true. So just because the existence of like the Wolf of Wall Street type people are out there and that these scams do occur,

00:02:00.59
Cameron
um We need to realize that is the truth. But the other truth on the other side is there's still some fantastic small companies out there that are growing really quickly that deserve investor attention.

00:02:12.03
Cameron
And the real truth here is that there is a group of microcap investors out there that are building these strategies and forming these groups and you know investing in these small growing companies. And they are doing very, very well for themselves.

00:02:28.91
Cameron
So it's interesting to me, I'm not going to sit here and be like, you know, the Wolf of Wall Street is done and we don't have that anymore. And that was just all just a movie. I mean, no, no, we still get that today.

00:02:39.44
Cameron
um So originally when I had started on social media and that's what has really changed with microcap investing or or penny stock investing, we we call ourselves microcap investors, right?

00:02:52.35
Cameron
Inflation, not a lot of stocks are worth pennies these days. They're typically, you know, 50 cents to a dollar. um But what happened with me is that I was a microcap investor. I was a penny stock investor.

00:03:04.96
Cameron
And it wasn't until about COVID, COVID time, right? Where I got on social media for the first time. I was a no social media guy. I had no Facebook. I had no nothing. 43 years old at the time, 42 years old, I got on social media and I realized like, wow, there are other people out there like me that are investing in these small companies that are doing very well financially for themselves.

00:03:29.07
Cameron
And I started forming more connections and more of a group and discovering that there was other people out there like me. At the same time, I also discovered when I got on social media that the Wolf of Wall Street hasn't gone away either. And there's all there's another group and or groups of these people promoting these penny stocks and doing it, you know, somewhat unethically at the very least and and potentially occasionally, you know, not just unethically, they take it a step further and it's criminal.

00:03:57.28
Cameron
Right. So both of those groups still existed. And I actually started out on social media as a channel that was exposing these scams, exposing the Wolf of Wall Street investors.

00:04:10.45
Cameron
And, ah you know, some of my content was identifying good good stocks, good companies, but 50 percent of my content or more was exposing scams and content was good.

00:04:22.41
Cameron
it It was not very hard to go out there and find some of these companies that that were doing some very questionable things and making content on social media.

00:04:22.85
David Barbato
Ha ha ha.

00:04:32.77
Cameron
For me, it's YouTube videos, you know, exposing what they were doing that was wrong. And I was trying to educate people. microcap investors protect investors that come down to this space. I was trying to prevent them from getting scammed.

00:04:47.15
Cameron
And i was I was making these videos showing people what to look for to ah to avoid these scams. And one of the problems with it is is that there's a lot of money in it still.

00:04:58.08
Cameron
There's a lot of people out there that are making money doing this type of thing. And after about two years, I grew my channel to 6,000 subscribers and I got canceled, I got doxxed and I got threatened with lawsuits, right?

00:05:12.14
Cameron
Because exposing to too many of those scams really puts a ah target on your back.

00:05:12.31
David Barbato
Wow.

00:05:17.50
Cameron
And yeah, it was it was not a fun experience. So that actually happened on basically Christmas Day of 2023 is when my channel, my first channel was cancelled where I was exposing these scams.

00:05:32.07
Cameron
So Wolf of Wall Street still exists. They're still powerful. They're still making a lot of money out there. But then if we focus on the positives from that, right?

00:05:38.43
David Barbato
Wow.

00:05:41.59
Cameron
So I had to decide right then, Christmas of 2023, do I just quit? Do I give up? Do I restart another channel um exposing these scams? Or do I do something different? And I decided to take a different approach, which was...

00:05:57.93
Cameron
if my efforts to expose scams weren't really appreciated um and and face that constant negativity and lawsuits and doxing and everything, how else can I educate investors? and And the other way to educate investors was to take that ah more positive approach, where now I try to focus 99% of my effort on not exposing the bad companies, but providing more attention, more eyeballs, more coverage for some of the good companies that don't get enough recognition, that aren't paying for promotions, that aren't paying for ah paid marketing media and and pump and ups, but the good little companies that are actually focusing on financial fundamentals and they're too humble and they don't promote themselves enough.

00:06:46.24
Cameron
I can educate investors by connecting those good companies with good investors. So since 2024, I reopened my channel. I now have commonsenseinvesting.ca and I've diversified myself a little bit where I'm on multiple platforms now. They can't just cancel one of my platforms.

00:07:06.92
Cameron
And i've I've dedicated myself to educating investors that there is huge opportunity in microcap stocks I believe that this is where retail investors should be investing, not mega caps and large caps where we're competing with institutions and people that have, politicians, people that have resources well above us as far as ah being able to obtain information.

00:07:34.34
Cameron
ah For retail investors, micro cap stocks is the the perfect place to be is willing as long as you're willing to put in the work. And so for the past, I guess, whatever it is now,

00:07:46.00
Cameron
you know one year and probably nine months of of refocused into those educating investors that microcap stocks are where to be, that there are good companies out there. Here's some examples of some good companies over time. I show that look at the amazing returns you can get from these good companies and i much more focused on on those positives. So.

00:08:06.27
Cameron
um Yes, like the the Wolf of Wall Street, nothing has changed there. um It's still going on. But what what has changed is that social media and the availability of information now for retail investors is is making and allowing us to put together the the good microcap investing communities, ah microcap club, small cap discoveries, Keystone Financial plays around in microcap stocks. Like there are some fantastic, ah Rivmont, Matthew Martin over at Rivmont, there's some fast fantastic microcap investors out there.

00:08:43.54
Cameron
We're forming these groups and investing where we should be, which is in these smaller, smaller, high growth companies. And we're able to do that because of social media and the availability of information.

00:08:57.45
David Barbato
Nice. Yeah, it's it's really interesting how ah people see the the Wolf of Wall Street and and kind of think that that world doesn't exist anymore. But you just have to go on Twitter and see like search for a random ticker, right? And you see so many of these accounts just...

00:09:17.92
David Barbato
pumping and dumping these penny stocks. And it's it's even ah bigger with the crypto, right? So it's it's just changed a bit from what I understand what you said.

00:09:32.44
David Barbato
um But with all that said, what is still a myth that exists or ah still survives among new investors when they hear about penny stocks or microcaps that you think isn't correct?

00:09:48.57
Cameron
Well, there's there's probably quite a few, but I think one of the main things is that um to be a successful microcap investor, you really have to take this space seriously. You have to dedicate yourself to it. But mostly for me, I would suggest that you need to be a very skeptical person.

00:10:04.70
Cameron
You need to you know get rid of all those voices in your head, the things that you've been taught over the years. Like, I can't speak to where everybody's from, but I'm i' Canadian. I'm from Canada.

00:10:15.21
Cameron
And I tell you, the financial education here is terrible. And the the tolerance for risk here is terrible. So as a as a young Cameron growing up, I was told like, you know, it's too risky to invest by yourself. You have to go to the bank and get a financial advisor.

00:10:31.26
Cameron
And then it's, oh my gosh, you invest in stocks? Stocks are way too risky. like So basically as a Canadian, we're taught to go to a financial advisor ask for the lowest possible risk portfolio we can get. And that financial advisor basically buys bonds, GICs, and gold, right? And it's like, i could I could do that myself if I wanted to.

00:10:53.24
Cameron
And then you're a young person getting, you know, three, four, 5% returns instead of, yeah being in that building wealth position that you should be in where you're getting 10% plus returns, right?

00:11:05.38
Cameron
So it's getting over that hump of skepticism and fear of risk. Micro cap stocks are risky. There's no doubt about it. we We talked about that. Well, there's still scams out there.

00:11:20.01
Cameron
I would say even myself as an experienced investor, I have you know probably one in 10 stocks ends up going to zero or being some form of scam. that That does occur out there. You have to be willing to position size and have some other strategies out there.

00:11:35.41
Cameron
But if you come down here and you're willing to to put in the time and put the work, there's amazing returns out there to be gained. So one of the myths that typically invests that I see a lot of the time is we'll get these large investors that invest in mega cap stocks, right?

00:11:51.40
Cameron
And they think it's fun. Oh, I'm going to go play around in the micro cap space and they don't take it serious. And typically what I see is that these large investors will get hooked in by some story stock.

00:12:02.81
Cameron
They've got some product or service that's going to change the world, that's going to save people, it's going to grow a thousand percent every year for the next decade. And you get these large investors coming down into microcap stocks, buying these one or two stocks that promise the world, um but really...

00:12:21.00
Cameron
They don't have articles written on them on Seeking Alpha. They have no other opinions. the The investors don't do the research to read the filings themselves. They're just coming down here and microcap stocks are basically treated like a lottery ticket.

00:12:35.29
Cameron
I'm going to buy this one or two tiny stocks and it's either going to make me a fortune or it's going to go to zero. And what typically happens is because they get lured in by those popular story stocks, um it does well for a while.

00:12:48.44
Cameron
They think they're geniuses. And then over time, cash burn, dilution, more cash burn, more dilution, more cash burn, super heavy dilution, and and your tiny little stock has now gone to almost nothing.

00:13:03.34
Cameron
And the large investor says, oh, penny stocks, they're all garbage, they're all scams, they're all terrible, stay away, they're too risky. the The fact is with that with that myth is that if you get in here and there's guys building you know full strategies, managing risk, when you get into this space and you build a strategy to to manage that risk and you you learn the ways to avoid those scams and you're not looking for those story stocks, you're looking for fundamentally growing companies with

00:13:38.36
Cameron
They all have some problems because they are micro caps. If they didn't have any problems, they they would be larger companies, right? they're all They're all fighting some challenges, but you could still find some some profitable and growing companies that are massively mispriced.

00:13:54.50
Cameron
um especially compared to the like the larger cap stocks that are 60 times earnings, 80 times earnings, 100 times earnings. If you do the work to actually find these companies down in this space, you'll you'll find this profitable growing company that's single digits P to E and it's it's almost too good to be true kind of thing.

00:14:16.35
Cameron
But it's too many people treat micro cap stocks like lottery tickets. I think you have to come down here, give it a real shot, Learn how to read earnings, build a strategy on on finding these good companies, and I think you will be happy with what happens after that.

00:14:34.72
David Barbato
Nice. And so from your point of view, what should new investors look for when analyzing a microcap company? So let's say i'm I'm a new guy, I'm coming down to microcap, I used to invest.

00:14:47.36
David Barbato
Maybe I'm a bit familiar with investing through larger caps, but I want to experiment with microcap. So what would you tell me or advise me to look for?

00:14:57.43
Cameron
Yeah, so, and it's a good point. I love that point where whether you're a new investor or you're new to microcaps, I feel like it's a learning experience.

00:15:04.05
David Barbato
Yeah.

00:15:05.29
Cameron
Just because you're investing in large caps, this is a very unique space. And so what I tell people, the easiest way, what I tell people is go through this thought experiment Let's say you sell absolutely everything you own. You have $1 million, dollars but that's it for the rest of your life.

00:15:23.63
Cameron
And you have to buy a company that is now going to support you, your growth throughout your life, possibly your family. Like you have to buy a company, a single company you have to buy that's going to support you and your family for the rest of your life.

00:15:39.31
Cameron
What would you buy? and And going through that thought experiment, instead of looking at, okay, I'm looking for this valuation and this growth and these numbers and this and that and this other thing and making it very complicated, that simple exercise narrows it down to possibly the top 4% or 5% of companies because you're looking at not just specific and very confusing metrics, which you can learn over time, especially as a new investor, you're looking for a high

00:15:41.25
David Barbato
Mm-hmm.

00:16:08.76
Cameron
quality company and that's it so you know you look at these story stocks that promise the world and ah don't make any revenue yet right um would you invest your last dollar in that would you expect that story stock that makes no revenue to support you and your family for the rest of your life seems pretty risky to me but people invest in those all the time um You know, or would you invest in that slow, boring company that's getting 0% growth, but yes, they are making some cash. I mean, that might work for now because it is cash producing, but with that low growth, you know, what's going to happen in 20 years, 30 years with inflation if you can't get that company to grow?

00:16:53.91
Cameron
that might not be the best investment either. So a lot of the people looking for deep value in microcaps where the the company isn't growing enough, that might not be the wisest decision either.

00:17:04.57
Cameron
So if you're truly investing your last dollar and you are buying this company and it's going to support you for and your family for the rest of your life, you're typically looking for some growth. You're typically looking for quality revenue, quality growth. You want to see some earnings, you want to see some cash and and maybe you could take a little bit of risk where it's not quite cash producing yet or it's not quite cash profitable yet, but it is going to be very soon.

00:17:31.81
Cameron
you You find a company that's not only good today, but is, is, is growing, um you know, it's improving every year and it's trending upwards. And I mean, if you could just simply find that where you're looking at a company, it's, you know, it's already a good company, fairly high quality revenue, it's profitable or close to profitability and it's improving every year.

00:17:54.02
Cameron
and it's got some good management that's not gonna run away and and scam you when you buy the company, um all of a sudden, you've got probably a winner. you've You've just thrown 90 to 95% of micro cap stocks in the garbage with that simple criteria, and you're left with some of the top stocks.

00:18:13.37
Cameron
And only then does it get a little bit more complicated as far as like, okay, how much growth and what's their valuation. But at that point, you're already dealing with, you know, the best of the best. So look for a good little company that you would like to own. And that's the interesting thing in microcaps, right? Like,

00:18:31.22
Cameron
people forget when you buy shares of a company that you're an actual owner of that company. And that's because when you're investing in NVIDIA, nobody is deluded enough to think I buy a couple shares in NVIDIA and I'm an owner of NVIDIA. Like, let's get real here, right?

00:18:45.05
Cameron
But with some of these micro cap stocks, these penny stocks, They have a $12 million dollars market cap. If you're a larger investor and you put $150,000 into that company, you might be the largest shareholder.

00:18:57.35
Cameron
so You are even smaller retail investors.

00:18:58.58
David Barbato
Yeah.

00:19:00.71
Cameron
when you're When you're buying shares of these companies, you are literally an owner. You you could have a percentage of ownership, ah a meaningful percentage of ownership in these companies.

00:19:12.29
Cameron
So getting that thought process of, making sure you're looking for good companies that would, that in real life would support your family. that That's kind of what I'm looking for. And and it's like that type of thought process, which is why I named my channel, right? Common Sense Investing.

00:19:28.49
Cameron
I'm not gonna sit here and, you know, throw, you know, financial metrics at you, like I've got a, you know, six year degree in finance or anything like that. It's the simple thought thought process of finding a company that you would like to actually own. And that will probably be a good stock.

00:19:45.05
David Barbato
Got it. And and and say we we already eliminated 95% of the microcap universe. So we are left with that top quality 5%. Then what single metric or what number should investors follow after eliminating the 95% that maybe isn't worth looking at?

00:20:10.70
Cameron
So I would focus on, and and again, this is a bit of a thought process in microcaps and tiny companies. I would focus not on one specific number, look for trends, look for improving.

00:20:22.17
David Barbato
Mm-hmm.

00:20:23.28
Cameron
um that is That is what I do in microcap stocks. that That is kind of my last advantage, I think, moving forward and the opportunity in these small companies. fighting against artificial intelligence and all of these AI powered stock screeners and and things out there. If I could find a company that's trending up before AI can figure out that it's trending up, I'm i'm going to do very well.

00:20:47.72
Cameron
So I don't really focus on one single number. i am I am looking for those trends and it comes back to that concept of a good company that's improving. So, you know, things that we're looking for is inflection points.

00:21:01.96
Cameron
So, ah you know, the company is maybe growing in revenue and that's noticed by the market, but are they hitting an inflection point from unprofitable to profitable? And in the next 12 months, they're going to going to report three quarters, four quarters of growing profitability on stock screeners. If I could find it as it's hitting that trend,

00:21:25.01
Cameron
That's what I want to see. um It might be simply that it's a trending improvement on the product that's not getting noticed by the market. So the product is improving, company is better getting better, company is fundamentally improving, again, as as a small business, but share price is going down for whatever reason, macroeconomics, trade fears, whatever it is.

00:21:47.08
Cameron
You get that improving, trending up company with a declining, trending down share price, You know, that's kind of something that I'm looking for. So there are certain requirements. I mean, we we be basically have what's called the the twin engines here in microcap stocks. And that is, um the first engine is kind of two things combined, which is you're looking for sales growth and you're looking for margin expansion.

00:22:11.05
Cameron
And basically what that's saying is you want increasing profitability, improvement, right? You need sales growth and you need yeah profitable or close to being profitable trending up.

00:22:21.94
Cameron
And the other thing is is the multiple and expansion. So with that, like I said before, Sometimes you'll be in here and you'll find this massively growing company that's so mispriced and it's sitting at, you know, 10X PDE and in a year's time it goes to 30X PDE. Well, you get massive returns. You get those 200% returns without the company doing much. Just the valuation expansion alone is 200% gain.

00:22:51.14
Cameron
um So we're we're looking for growing profitability.

00:22:51.18
David Barbato
Yep.

00:22:54.57
Cameron
We're looking for the multiple expansion, which is the discovery process as these small stocks, as they get discovered by larger investors, larger investors, funds, small institutions, large institutions.

00:23:06.68
Cameron
You get that discovery process and multiple expansion. That is kind of the second engine driver here that we're looking for.

00:23:15.15
David Barbato
Interesting. And i think one of the ah things that got me hooked on what you just said is the part on you AI. Not because I'm super excited from an investing standpoint, but I've been getting a lot of comments from my non-investor friends on like...

00:23:33.57
David Barbato
things I could do to use AI to improve my process. And maybe I'm just being bit late to the trend, but i wanted to know what's your opinion on how AI is helping you do your research and analyzing these companies and looking forward, what kind of role will it play in investing in your opinion?

00:23:57.17
Cameron
Right, so i I try to be, number one, I'm a very contrarian. I like a challenge. And and number two, I try to stay a positive person. So I know like 15 years ago, I was told, well, don't invest. It's too risky. Like you're never going to beat financial advisors. You're you're never going to beat accountants.

00:24:13.95
Cameron
You're just some guy, Cameron. You don't have that financial background, so you can't beat those people. And I think I have. right like I've done very well for myself over this time. And now, fast forward to 2025, and I've put out posts about this where the new thing is, well, give up investing because you're not going to beat these like AI-powered quant strategies.

00:24:34.87
Cameron
And for me, that's a challenge. Like game on, let's do this, right?

00:24:37.31
David Barbato
Yeah.

00:24:38.19
Cameron
I'm i'm going to prove that i can I can beat these AI powered quant strategies. And I do feel like there's huge opportunity here with with artificial intelligence combined with a real human ah microcap retail investors combined with the small little companies we get out there.

00:24:55.11
Cameron
And basically there's two reasons for that. Number one is that the information playing field has now been leveled. Institutions and funds and larger investors used to have all these resources that we simply didn't have access to.

00:25:10.44
Cameron
um You know, actual hard data through major screens used to be, you know, you're talking $50,000 licensing fees that these institutions were running to get this type of data.

00:25:10.59
David Barbato
Yeah.

00:25:22.35
Cameron
We can go get it now usually for about $25 month. um So that that that availability, the access to information now for your average retail investor is much more level to the to the larger players than it ever has been in the past, right?

00:25:40.32
Cameron
Then also the time component. Another advantage that these institutions and funds used to have, these large investors used to have is time, right? I mean, most of your average retail investor has a day job, right? that This is a hobby where they're trying to make some income on the side. they're trying They're in the accumulating wealth phase of their life and they want to invest in microcap stocks, but they still, they're an electrician, whatever they're doing during the daytime, they still have a job.

00:26:07.02
Cameron
They didn't have time to find all of these companies. Again, now, thanks to artificial intelligence, the time required to learn about a company, research a company, compare it to other companies has has been reduced significantly to the point where we can compete with some of these larger players in the space. You know, you can sit down for two and two or three hours on a weekend and with with help from artificial intelligence and some of our microcap stock communities kind of getting, you know, narrowing that

00:26:41.20
Cameron
that that pool of thousands of stocks down to maybe the best couple hundred. And then you could take artificial intelligence and find out out the best couple hundred stocks, which ones are your favorite. And you could learn about them very quickly, very easily.

00:26:56.65
Cameron
that's a huge opportunity. That is a huge opportunity, right? Is more information for retail investors, less time it needs to research a stock. And then when you combine those two things and where I think my opportunity really lies is if you're willing to do that,

00:27:12.95
Cameron
put in the time, research more stocks. We have now more, have more information. I think that in the future due to AI, i could still beat the AI because I could find those human only inflection points, right? Artificial intelligence is going to get better every year, but they're going to find again trends, growing profitability.

00:27:32.95
Cameron
They're going to find trends of an improving company once it's once it's reached certain milestones. Again, if I could find these smaller companies down here in this space in microcaps that aren't discovered yet by artificial intelligence, and I can, as a human, recognize that inflection point, recognize that change where this company maybe wasn't that good last year,

00:27:54.84
Cameron
But this year it's improved. And I think next year it's it's going to improve to the point where it is going to get picked up by AI. All of a sudden I'm at the the forefront, I'm at the the the very initial stages of the discovery of this company.

00:28:10.88
Cameron
And I think that is really the opportunity right now in microcap stocks, because thanks to artificial intelligence, what I see is that it's now going to take less time and we're going to get more consistent discovery.

00:28:25.15
Cameron
So in the old days, five years ago, um you know, a company could report growing profitability and sometimes they wouldn't get noticed for two years, three years, four years.

00:28:36.03
Cameron
I mean, that is part of why I created my channel is to create some coverage, put some eyeballs onto these good companies that nobody was looking at.

00:28:36.84
David Barbato
yep

00:28:46.13
Cameron
But now, thanks to artificial intelligence, I think these companies that do a good job, that are good companies with good management teams that are growing And, you know, high quality growth and get profitability and start producing cash flow. They are going to get picked up by the system.

00:29:02.53
Cameron
And we're going to get some nice, consistent discovery. We're going to get some really nice, consistent share price gains compared to what we used to see in the past. And I think that's such a huge opportunity for your average your average person to get into microcap stocks and find those opportunities. human only inflection points ah before AI can can find them.

00:29:25.38
David Barbato
Nice. i Actually, i have a follow up on that. um i'm I'm really curious to know, how are you implementing right now in a practical use case scenario AI in your process?

00:29:40.91
Cameron
Well, it it depends, again, how much you want to. I try to to break my channel down into, I try to do as much for free as possible. Because I'm thinking about like the new investor who might only be investing $1,000 a year, and they they can't afford a $500 a year chat GPT subscription because that's half of their investing capital.

00:30:01.97
Cameron
Right, but there are some free options out there, whether it's the free version of ChatGPT, whether it's ah Perplexity AI has a really good AI platform. There's some, Copilot is actually getting better.

00:30:13.95
Cameron
There are some free versions out there where you can even upload financial filings right into the artificial intelligence.

00:30:19.93
David Barbato
yeah

00:30:21.47
Cameron
You can ask it questions. um You can, if you don't trust its answers, you could ask it, okay, what page can I find this information on? um You could do better history searches for management teams. You could do better history search searches for board of directors.

00:30:37.74
Cameron
You can do a history search on auditors that are auditing the company, which is a great way to avoid scams, by the way, is researching the company that's auditing them and whether they're legit or not So,

00:30:49.52
Cameron
Again, it's not using AI to pick the stocks for me. I'm going to do that. And ah that's always, that's i'm i'm going to I'm going to crush AI.

00:30:56.28
David Barbato
Yeah.

00:30:59.93
Cameron
i just I know I am over the next five years because I'm goingnna i'm going to pick the the the better stocks than AI because of these human inflection points. But I can use AI to find those inflection points easier.

00:31:13.83
Cameron
And it's asking those questions, not not the generic, what's the best stock today? What's the highest growth stock today?

00:31:19.32
David Barbato
You think

00:31:21.54
Cameron
But I can go to AI and say, hey, can you tell me about the history of the CEO? Does the CEO have any alleged accusations of any kind of um and you know, alleged pump and dump or SEC charges. Can you tell me about that this company's auditors?

00:31:37.52
Cameron
Has this company's auditors ever been charged by the SEC or any other regulatory body for any kind of, um have they been fined in any way? Like we could ask these specific questions to not only do research quicker, but also do research a little bit deeper than we used to be able to do in the past. So it it's finding those questions Those human changes, maybe you use AI to pick out certain words you're looking for in their in their management discussion documents, right?

00:32:07.18
Cameron
um There's those certain ways to find those little inflection points that are getting easier using AI without letting AI do the work for you.

00:32:17.01
David Barbato
Yeah, I love how you you said don't search for what's the best stock right now. ah Because whenever ah some friend does that and comes up to me and says, look, I think this is a great stock.

00:32:30.88
David Barbato
Then i go and look at the numbers and it's like, I don't know, 20, 30 times sales and it's burning cash like crazy. And so it's it's really funny how how someone can actually recommend these stocks to someone.

00:32:40.03
Cameron
Yep.

00:32:46.42
David Barbato
And I believe that's the the better approach, right? So asking specific questions on ah given company or ah the management and actually understanding the fundamentals of the business.

00:32:57.93
David Barbato
So, yeah, I actually love that. And maybe going back a bit to red flags and actually how to analyze the stocks. What's something that makes you immediately close the tab on a company?

00:33:11.15
David Barbato
Let's say it's already on that top 5%. So it's not a scam ah or or anything shady, but on that top 5%, what makes you pass right away?

00:33:24.43
Cameron
ah Probably nothing. ah Probably nothing, to be honest with you.

00:33:26.65
David Barbato
Okay.

00:33:28.08
Cameron
So one ah one of the things that I tend to discuss a lot is that when you look back in hindsight, when you look at people investing in the microcap space on social media, it looks like everything is black or white.

00:33:40.75
Cameron
Like, you know, i can I do it myself. I'm guilty of it. I'll be like, wow, look at this stock I talked about last year. It's up 200%. Aren't I amazing kind of thing, right? Yeah. When you go back that two years, those those companies, it's it's a balance of potential risk versus a balance of potential reward.

00:33:58.76
Cameron
And I very much compare microcap investing to poker, like a Texas Hold'em style game of poker where you're not, you're never sure about anything. um The best hand, the best company in the world isn't always necessarily a winning stock or a winning hand in poker.

00:34:16.46
Cameron
But if you if you play those winning hands enough, ultimately, and you have a bucket of those winning hands, a bucket of those winning companies, you're you're going to win in the long term.

00:34:27.40
Cameron
You're going to occasionally lose a hand that looked good. You're going to get some hands that you win that you didn't expect to win. You're going to get some hands that lose that you didn't expect to lose. So there's there's no real red flags to me because I tell people again, try not to make it too complicated. Otherwise, you're going to get burnt out.

00:34:46.83
Cameron
My goal in microcap stocks is to make money. If I think a stock is... 50 cents today and I think it's going to go to a dollar in six months, then that's a good stock to me, whatever the reasons are.

00:34:59.34
Cameron
And, you know, we go through these different cycles of microcap investing. I feel like right now in 2025, we had a lot of new investors during COVID.

00:35:09.58
Cameron
I think something like 20% of the market was new investors um during the COVID time. And I would suggest in microcap stocks, it's probably more than 20%, probably 30, 40%, even 50% of microcap investors probably started during COVID.

00:35:25.76
Cameron
And we've gone through these phases of learning. And right now that phase seems to be these people, they've learned how to invest, but they're looking for the perfect stock that doesn't exist.

00:35:36.80
Cameron
um So look perfect growth, profitable growth, high insider ownership, high quality management, high quality board, perfect share structure, um you know and just perfect in every way.

00:35:36.94
David Barbato
Okay.

00:35:50.35
Cameron
High quality product with a moat, um All the the checklist, a checklist of things. And so for me, there's not necessarily one thing that makes me run away, at least from those high quality companies, there isn't one thing.

00:36:04.00
Cameron
um What it is for me is there's things that you can, you look at the companies, you look at all the potential rewards, but you also look at all the potential risks and you look at those risks and you're like, is that something I can live with? Can I sleep at night?

00:36:18.98
Cameron
um I have to, with an unbiased lens, look at all that risk. Think about the downside. What will happen if these risks happen? Will the the stock go down 20%, 40%, 75%, 100% those risks occur?

00:36:33.70
Cameron
look at the potential rewards Do the rewards balance out that risk? Can I live with that? Can I sleep at night with that? And then from there, if my answer is yes, I kind of balance out, okay, based on those risks and rewards, what size of a position should the stock be in my portfolio?

00:36:50.92
Cameron
So it's like poker in that you're constantly ah balancing potential rewards versus potential risks. You're looking at odds. Nothing, everything in hindsight looks black and white, but everything in real time is gray and you're balancing those probabilities.

00:37:07.02
Cameron
And then as new inputs come in, earnings, press releases, filings, company is improving, company is getting worse, you're, You're reevaluating your thesis, you're reevaluating your odds based on those new new inputs, and then you're making a new decision.

00:37:23.38
Cameron
So for me, if it's already a high-quality company, there isn't necessarily one thing that'll scare me away. It's basically if I get... new input that increases my risk.

00:37:36.82
Cameron
And again, another new input that increases my risk. Eventually, once those inputs keep coming in, eventually it changes that risk reward balance. And that's, it's a balance of probabilities. And at some point I'm just, I'm out.

00:37:49.63
Cameron
I'm either trimming, You don't have to sell 100%, right? You could trim to reduce your risk, trim small, trim medium, trim heavy, or just get the heck out.

00:38:00.35
Cameron
And it's it's always that slow input evaluation of balance of probabilities.

00:38:07.85
David Barbato
I think that's the perfect segue onto the next question. I was about to ask you on how you size these positions given the extra thin liquidity of these micro caps. And maybe for the people that aren't too familiar with these terms, you can also explain what a thin liquidity means. ah But yeah, that would be perfect.

00:38:31.74
Cameron
Right, so like thin liquidity is just essential, or liquidity itself is is basically the dollar amount of the shares that trade per day in a stock, right? and And what happens is when you get thin liquidity, you don't have a very high dollar amount of shares traded in that stock per day.

00:38:48.12
Cameron
So if you think about that in real time, if you're a large investor that wants to buy, i want to buy $250,000 worth of this stock, and it's only trading $5,000 worth of shares per day, that would be thin liquidity.

00:39:02.33
Cameron
And as a large investor, if you try to buy up those $250,000 $5,000 you're buying 100% the volume for more a

00:39:02.55
David Barbato
Mm-hmm.

00:39:09.74
Cameron
you're buying a hundred percent of the volume for the more than a month you will drive up the share price of that stock and at some point it will get so high that you it doesn't make sense to buy it anymore.

00:39:20.50
Cameron
So again, i don't have that problem. if You have to keep in mind is that microcap stocks are the the place for people to build wealth. This is your wealth accumulation stage down here in microcap stocks.

00:39:37.29
Cameron
I would suggest if if If you're worth $10 million dollars and you're thinking of putting like a quarter million dollars into a micro cap, you you probably don't have to do that unless it's your hobby, unless it's fun.

00:39:49.53
Cameron
um there's you know Rivmont has a micro cap fund, ah Pender has a micro cap fund. is For $10 million dollars investors, you could give your money to a fund and let them do the work for you.

00:40:02.35
Cameron
Micro caps are really for retail investors for the average person. Now, I don't know many average people that are putting more than, you know, five to $20,000 into a single stock in microcaps, right?

00:40:15.94
David Barbato
Mm-hmm.

00:40:16.98
Cameron
So typically for the smaller investors, the thin liquidity, a lot of people look at it as a disadvantage. I actually view it as an advantage. It's hard to buy.

00:40:28.04
Cameron
It's hard to get into. you You do your research. You You're investing $15,000, it trades $5,000 per day. It'll take you ah some time to buy that stock um without driving its share price up, but you could do it.

00:40:43.61
Cameron
And then if you're right, if you're right and the company improves, you're looking with the thin liquidity at a supply versus demand case in the future, where now the company has improved.

00:40:55.36
Cameron
Now larger investors than you want to buy it. Now institutions want to buy it. And it's it's it's got such thin liquidity, all of a sudden you have this high demand and low supply.

00:41:07.12
Cameron
and And there's absolutely no better place to be in the world, in the financial world anywhere, not just stocks, but anywhere in the financial world than in a situation where you control the supply that is very low of something that is in high demand.

00:41:21.99
Cameron
So thin liquidity for me, for your average investor, again, it's it's not a concern. It's an advantage for your for average people. It's a concern for larger investors, which I like, right? that's That's part of the discovery process. I want this company to first get discovered by your average person and then grow to the larger investors and larger investors and then small funds and family funds and then small institutions and large institutions. That's the discovery process.

00:41:53.88
Cameron
And once it gets up to there, you won't have a liquidity issue selling, I can guarantee. You've got a successful stock with high liquidity, everybody wants it, you own the supply of something that's in high demand, that's absolutely perfect. So again, it's it's breaking these common myths, it's breaking these common misconceptions in in microcap stocks that I could look at this again and people will say, oh, it's too risky because of this.

00:42:22.41
Cameron
And I say, like, think about it, sit down, think about it, use some common sense. This this risk that you've been told about is actually one of her greatest advantages.

00:42:32.17
David Barbato
Yeah, for sure. And I see like a movement of if if an investor spends enough time studying and learning and he has a small capital base, eventually he'll come down to small caps or micro caps because it's where it makes the most sense, right? It's it's harder to double your money if you're investing in a huge company rather than a small one. so So on board with your your thoughts and um it's it's nice to to see that actually small investors might have an advantage over the the big institutions in some parts of the market. right

00:43:12.48
David Barbato
So, yeah, I think that's fantastic. And I would like to go back maybe to the start of the interview where you mentioned you uncovered some scams and you got some problems because of it. You you lost your last channel.

00:43:28.15
David Barbato
And I'm interested to know what's the biggest scam you you ever uncovered and ah what was it all about? So you can give us maybe a bit of a case study on a scam.

00:43:40.54
Cameron
Right, so it's kind of nice because like i could I could probably talk about this one without getting sued because you know i think the company at this point I think is basically gone.

00:43:51.63
Cameron
But the the most devastating one I had was a company called Meta Materials. And it is the classic, it is an absolute classic scammy type stock.

00:43:57.40
David Barbato
right Okay.

00:44:03.39
Cameron
I wish somebody would do a documentary on it um because it's it's one of those, it's a meme stock, right? And in this situation, what you get is a tiny little Canadian company.

00:44:10.49
David Barbato
Okay.

00:44:15.39
Cameron
It was based out of, I believe, Dartmouth, Halifax, nova sco the Dartmouth, ah Nova Scotia, Canada, with a management group that was you know partially from overseas.

00:44:27.52
Cameron
And they they come into Canada and they open up. It was like M-Max, I think, was their ticker. And they were a tiny little microcap stock. And they were going to produce something that was going to change the world. It was this thin a nanomaterial film that was going to be put in absolutely everything to reduce breakage and stronger than anything out there.

00:44:48.47
Cameron
um And it's going to be going on all military devices and all technologies. You're never going to break a cell phone screen again. Militaries are going to have it on all their planes and blah, blah, blah, blah. It's going to change the world. This one, this one product technology.

00:45:03.19
Cameron
And, It went from a tiny little micro cap stock to a billion dollar company. It had a billion dollar market cap, right? Just on this potential, the promise, the story.

00:45:15.54
Cameron
They had zero revenues. um There's more of a story behind it. They had no revenues. They they took some of that capital. They went out and bought a company that did have some revenues so they could pretend. They could say, oh, look at it. We have got revenues. We're not a pre-revenue stock.

00:45:30.45
Cameron
But effectively, their core business was not getting revenue and how they would promote it and how they would pump it was ah patents and partnerships. So again, you you get these uneducated investors or maybe are even larger investors that are just hearing about this company for the first time and it's it's very promoted, spent money promotion on this this product's gonna change the world, it's gonna be ah ah worth a trillion dollars

00:45:39.93
David Barbato
Mm-hmm.

00:45:57.18
Cameron
You need to invest now FOMO, fear of missing out. It's going to go to, it's 1 billion now, it's going to go to 20 billion in a week kind of thing. And, you know, you what you what I thought is that when I would expose some of the issues, like, um you know, pointing out some of the concerns, you would go to their earnings call and it was like going to a science fair. They would talk about the science. They would talk about the product.

00:46:23.15
Cameron
There was no path for growth. There was no when is the revenue coming. There is no path to profitability. There's no discussion of cash. There's all these red flags. And I thought people would be happy with me and be like, wow, Cam, that's great. You saved me kind of thing. And instead, you get fight, you get pushback because these these kinds of companies they will convince you. They get a fan base where people fall in love with this company and they will be out there on social media and they will be embracing and positive reinforcement of anybody who likes the company and they will be trashing, doxing and threatening lawsuits on anybody who talks negatively about the company.

00:47:03.05
Cameron
And that that is the script, right? Is that if you want to support this company, you you you feel good. Everybody loves you. You're promoted. wow, look at this great new investor who loves my my company.

00:47:16.74
Cameron
And so you get this positive mental reinforcement. And that's tough for, you know, it's another story, and another podcast, but for vulnerable people and vulnerable investors that don't know what they're doing and or vulnerable people that think they're investing in this company that's going to turn their $1,000 into a million.

00:47:36.58
Cameron
And ah Metamaterials went through this giant story. They they never produced anything. Their cash burn was insane. They diluted, diluted, more cash burn, more dilution. The dilution got out of control.

00:47:50.68
Cameron
Eventually the CEO who was doing these activities was kicked out by the board and the board took a look at what the company was actually worth. And like I said, the company is effectively now gone.

00:48:03.83
Cameron
Um, so that that is the playbook, right?

00:48:03.62
David Barbato
Okay.

00:48:06.59
Cameron
As you find this, you find this amazing change the world product, you surround it with a social media presence of positive reinforcement and attacking any negative voices. And then you just let it fly.

00:48:18.88
Cameron
And the regulators aren't going to protect you. but MetaMaterials has has been my most famous one in that I think everybody heard about it. Um, there's videos coming out about it. It's also tied to another stock called, uh,

00:48:34.51
Cameron
ah shoot, I forget the oil and gas company it's tied to, but there's all kinds of problems over there. But the oil and gas company, which was a company it it bought, was a former stripper pole company that all of a sudden discovered you know billions of dollars of oil that didn't exist. and Another long story, but um basically that is the playbook is you you find something to pump people up. And once that momentum dies, you find a new thing to pump people up.

00:49:03.66
Cameron
And unfortunately, people lost all their money.

00:49:07.50
David Barbato
Interesting. i'm I'm so curious to know what's the biggest lesson you've learned from studying financial scams, because it's it's really interesting to study these case studies and and the scams ah just because they're inherently ah fascinating stories and and so on.

00:49:26.25
Cameron
Yeah.

00:49:26.72
David Barbato
But how can an investor apply those lessons into actually getting better or having better returns over time? So, yeah, maybe that would be useful.

00:49:38.45
Cameron
so it's not we're we're getting into like i'm generally a positive guy this is where i turn into a negative guy and i say things that people don't like um you' you'll be better as an investor you'll be better as a micro cap investor if you're you know i always joke around grumpy skeptical prove it person right if you are that grumpy old man i say all the time grumpy old man

00:49:57.15
David Barbato
Mm-hmm.

00:50:01.22
Cameron
I don't like your company. I don't like your stock. Well, why? This is the best company ever. No, because of this, this and this. This is why I don't like it. ah It sucks because in life, we typically want to be that positive person. We want to be like, yes, this is the best company ever.

00:50:15.96
Cameron
Yes, I totally agree with you. Yes, I'm going to invest in it. Yes, we're all going to make money together. Yes, I trust the CEO and the management team. Yes, I love the... It doesn't work that way.

00:50:27.22
Cameron
um

00:50:27.44
David Barbato
Yep.

00:50:27.83
Cameron
You know, similar again, I always come back to the poker references, but the best poker players, what percentage of hands do they fold? Most of them. Like, um ah playing hands is dangerous.

00:50:36.63
David Barbato
yeah

00:50:39.80
Cameron
You only play your hands when you have that risk or reward balance of probabilities. um So the one thing I've learned from these scams, please, people be skeptical. I've warned people, when you get into microcap stocks, and I've said this whole interview, this this entire time, that this is the place for um retail investors. This is the place for average people to be investing, in my opinion.

00:51:03.62
Cameron
the one The one exclusion for that, the one person or type of people that I would say that that is not true and you should absolutely stay away from microcaps is people that are overtrusting.

00:51:14.96
Cameron
You have to be skeptical in this space.

00:51:14.68
David Barbato
Mm-hmm.

00:51:17.12
Cameron
There are scams, there are many scams. It's not just scams, there are companies that simply, you know honestly over promise and under deliver. There are companies that have challenges that they don't just don't communicate well enough.

00:51:30.35
Cameron
There there are other things other than scams that you know the bucket of good stocks is very low in this space. I say it's normally 4%. So that means you have to fold 96% of the hands you're given.

00:51:44.48
Cameron
You have to be skeptical with 96% of the companies that you research. And it's it's the trusting, believing that, yes, this comp this product is going to save the world. Yes, the CEO is the greatest person ever, very altruistic, and he wants to make me a millionaire, right?

00:52:03.05
Cameron
It's that trust, right? that that gets people in trouble. So ah it's tough to say sometimes, but what I've learned over the years, you will make more money coming down into microcaps and being that negative, skeptical, angry person.

00:52:16.54
Cameron
And that's hard for some people to do.

00:52:19.34
David Barbato
Yeah, and I guess you can be positive in the rest of the endeavors in your life. Just be compartmentalized, so to speak. um And it's it's interesting also that you mentioned the under-delivering and over-promising part because arguably that's maybe the most dangerous scam of all.

00:52:40.10
David Barbato
Because you cant you can't if you're like an experienced or seasoned investor, you can't ah figure it out on the numbers and maybe you are trying to to to spot an inflection and actually believe the management team and then you get disappointed.

00:52:56.09
David Barbato
um So maybe that losers like makes investors lose more money than the the actual ah easy to spot scams.

00:53:07.52
David Barbato
um Now, turning into the positive side of things, I would love you to ah kind of give us a pitch or case study on a company you you find interesting right now.

00:53:20.66
David Barbato
I know we have some some common investments, um not sure which of them, so not going to mention names. But yeah, if you if you have ah an interesting thesis you'd like to share with my audience and I, it would be cool.

00:53:35.98
Cameron
So i don't I think I'm actually going to pass on this one, but I'll explain it and offer you more than just a and a no.

00:53:40.84
David Barbato
Sure. Yep.

00:53:43.49
Cameron
But here's one of the things is that, um you know, generally my channel, I try to, a common misconception is that a lot of these platforms and a lot of these people are stock pickers. Right.

00:53:54.01
David Barbato
yep

00:53:54.37
Cameron
um I don't I don't ever want that misconception. I don't want to pick a stock because I don't want anybody thinking that I'm a stock picker. I'm not a service that, you know, I've i've got a Patreon. I've got a sub stack. People subscribe to it. People pay me money.

00:54:07.05
Cameron
I absolutely want zero confusion that anybody subscribes to that service and they think, well, Cameron is going to like pick stocks for me and tell me what to buy or what to sell or anything like that.

00:54:18.68
Cameron
um What I am is a communication and networking service, basically, commonsenseinvesting.ca. So i like putting good microcap investors together. i like putting new microcap investors with experienced microcap investors.

00:54:36.54
Cameron
And we have conversations and we do research and we network together. So like you talked about some of those concerns about like finding scams and, you know, over promising and under delivering that's best leveraged by being in a group with other people and using AI as well these days.

00:54:51.72
David Barbato
Mm-hmm.

00:54:54.50
Cameron
But you know that that group leveraging a group of micro cap investors is what I'm going for. So ah my platform is communication, research, networking hive mind let's all find the best good companies and that's what i do so i don't you know the old cliched statement is i would rather teach a man to fish than then give you the fish if i if i give you a stock you make money you make make money on this one stock and then lose money in the next three stocks and and this interview basically goes to waste um

00:55:28.65
Cameron
So, you know, my my stock pitch would be, you know, use artificial intelligence to help you research companies. Look for companies that are that you would like to own, that you would really like to own, that are good companies.

00:55:43.53
Cameron
Companies don't focus on the fancy fancy metrics. Find companies that are that are improving and maybe their share price isn't improving, but the company fundamentally is improving. That's what you're looking for.

00:55:55.12
Cameron
Join ah stock community, right? Leverage those, the the experience, the conversations, the research. Now, whether that's mine or whether that's Microcap Club or Small Cap Discoveries or Keystone or Geo Investing or any of the the fantastic places out there for microcaps, I don't care. It doesn't have to be mine.

00:56:14.79
Cameron
join ah Join the best stock communities to get that networking and conversation um You can actually find most of them on my website, commonsenseinvesting.ca, and there's there's a tab that says resources, and under that, I've got an an Excel spreadsheet with links to all the best microcap communities in there.

00:56:34.46
Cameron
Follow the right people, and you'll get so many good stock pitches. You'll get 10 a month that are are more than what I can deliver, and you'll get advice and experience, and you'll learn over time to take those 10 pitches a month and find your favorite one stock every month.

00:56:50.15
Cameron
kind of thing, right? So that's what I want to go talk about.

00:56:50.91
David Barbato
Mm-hmm. yep

00:56:54.34
Cameron
If I'm going to give a stock pitch, what i what I'd like to communicate to people is I always joke around about this, it's fun, but I don't do YouTube videos for my health. I mean, you probably know David yourself, you're here as well, how difficult it is to to make videos, the preparation, the time, the editing, audio, video,

00:57:13.99
Cameron
like I get paid, people don't realize this, but I usually make about $10 per video that I make on YouTube, 10 bucks, right? I'm not making, I'm not becoming a millionaire on YouTube. So why do I have YouTube?

00:57:27.17
Cameron
Um, it's because that I enjoy communicating with people. I like talking obviously.

00:57:32.75
David Barbato
Oh.

00:57:33.12
Cameron
And, uh, I want to educate people. I want to form these groups of microcap communities. But the fact of the matter is, is all these stocks out there, there's there's thousands and thousands of microcap stocks.

00:57:45.07
Cameron
I'm not randomly picking those stocks and I'm not making these videos for my own health. Some of these videos can take me 10 hours. If you factor in researching the company, right?

00:57:57.71
Cameron
Taking the time, reaching out to people, talking with management, there could be four, five, six hours of research. Some of the videos that I make, it's not four, five, six. We're talking about 40, 50, 60 hours of research on some of these companies.

00:58:11.61
Cameron
Then I make a a YouTube video where I have to, you know, script it, do all the slides, record it, edit it, make thumbnails, make catchy taglines, and then finally publish it.

00:58:24.04
Cameron
we're We're talking anywhere from, you know, four hours to 400 hours probably for some of my videos as far as time and effort. So if I'm making a video on a stock,

00:58:35.48
Cameron
It's not because it was a quick nine minute video. It probably took me days or weeks to make this video. Take a look at it. Take a look at it.

00:58:43.83
David Barbato
Yeah.

00:58:44.42
Cameron
i look I look back at my, all i i keep records of all my videos and I ran the ah returns of all my my videos. And of all the videos, of all the companies that I introduced in 2024, the return today in August

00:59:03.38
Cameron
Now, that's not saying that they all got 78%. Some went to zero. Some are down 80%, 90%.

00:59:07.95
David Barbato
yeah

00:59:10.14
Cameron
Some are down 50%. But there's others. There's videos on companies that I made in 2024 where those stocks are up. Zoom Technologies up 1,100%. NTG Clarity Networks up 1,300%. When I make those videos, people are like, why, Cameron? That's such a garbage stock.

00:59:27.31
Cameron
Do you think that I spent 10 hours making this video because I think this is a garbage stock? Do you really think, you know, that i that I put in that time and effort to to present a ah stock to you and and I just think it's going to be garbage?

00:59:34.01
David Barbato
Hehe.

00:59:41.30
Cameron
they're They're not all going to be winners. Yeah. Basically with my videos, it's not the top 4%. I basically eliminate the the worst 80% and I make videos on the top 20% of the stocks that I think are out there.

00:59:56.05
Cameron
So there are going to be losers. You you got to do your own research. And that's obviously what I encourage people to do. But there's some real gems in my videos. There's stocks stocks just from 2024 are in my YouTube videos from 2024.

01:00:10.70
Cameron
are in my youtube videos from twenty twenty four Now I'm making videos in 2025. I get the same problem. I'll make a video on a stock camera. It'll be a garbage company. Why did you waste your time?

01:00:22.46
Cameron
Wait 18 months. well We'll see where the stock is at. it's So I don't have a single stock pitch other than go look at my YouTube channel.

01:00:26.81
David Barbato
yeah yeah

01:00:31.31
David Barbato
Got it. Got it. Actually, ah the intention was to to learn from a more practical ah use case scenario. So maybe I can reframe the question and you if you still don't want to answer it, it's it's totally fine by me.

01:00:46.59
David Barbato
And I think people should definitely go look at the videos and the people that say that ah that company is garbage and you spend 10 or 20 hours researching it. and getting no money from YouTube, maybe they should rethink that.

01:01:00.80
David Barbato
um But yeah, if you have a past... company or past investment that you're no longer invested, that it's no longer a good opportunity, but it was a good ah can be a good um case study for for me and my audience.

01:01:16.03
David Barbato
I would really appreciate that. Maybe one of those 2024 stocks that went up a lot and we can give all the disclaimers, it's not an investment right now. It's just for the the purpose of learning from a practical scenario.

01:01:30.33
Cameron
Sure, so a good example of that and still, and you know, disclaimer, I'm still a shareholder of this stock. ah This is NTG Clarity Networks. So what you get in these tiny microcap stocks, NTG Clarity Networks at the time that i introduced it to my channel was a three and a half cent stock.

01:01:40.59
David Barbato
Mm-hmm.

01:01:49.01
Cameron
What you'll find is that a lot of, you get a lot of misconceptions and biases, even within the microcap stock community, right? Not saying we're perfect, that all large cap investors are bad. We've got our own biases.

01:02:01.56
Cameron
Typically when you get into like the the penny stocks, the true penny stocks that are three pennies, ah most of them are garbage, I hate to say it, but normally they're down to those levels due to high dilution.

01:02:13.16
Cameron
So in this case, NTG Clarity Networks was at the time a three and a half penny stock per share, and they were operating out of the out of the kingdom of Saudi Arabia. So if it wasn't enough risk that this was at the time an unprofitable company worth 3.5 pennies per share operating out of the Middle East, which is known for volatility.

01:02:36.78
Cameron
And if something happens, it could go to zero very quickly type risk. It was a completely ignored stock. Nobody was paying attention to it. What you saw in the background was that I discovered it in, I think it was late 2023.

01:02:53.41
Cameron
And um it had already had two years of improvement. Everything that I've talked about in this video about find these companies that aren't discovered, that share price might be going down, but the company is improving.

01:03:05.77
Cameron
They already had two years of improvement. They had growing revenue. They were about to reach an inflection point to to being a positive. And I actually, I think before they got discovered, they did. They were just hitting that inflection point where they were actually, at least on an EBITDA basis, positive.

01:03:21.45
Cameron
Nobody had heard about them. Nobody knew about them. So all these biases due to risk. when you dug into NTG Clarity Networks, this is the opportunity in microcap stocks is finding what only a human can find.

01:03:34.06
Cameron
I mean yes they were in Kingdom of Saudi Arabia, you do your research, um much less risk today than it used to be. I mean the US is getting along with Saudi Arabia, oil prices have been high, they're they're flowing with money and they're trying to take all this cash to diversify their economy And one of the benefactors of that is this little Canadian company that's trading on the Canadian markets for three and a half cents that nobody knew about.

01:04:01.94
Cameron
So you find those little inflection type opportunities that only a human can discover. You know, I spoke with management, what's changed? Convince me how you're not a three and a half cent company.

01:04:14.06
Cameron
And what you'll see then, and of ah I've got slides out there somewhere, um you could literally follow the perfect discovery process for this NTG Clarity Networks, where they did a reverse split, so they weren't a three and a half cent stock.

01:04:28.08
Cameron
They went up to all of 20 cents. But because of that 20 cent share price instead of three and a half cents, they got discovered by retail investors, small retail investors like myself.

01:04:39.47
Cameron
That got more attention. The company continued trending and improving every quarter. They they ah made promises, executed on those promises. Earnings weren't perfect, but earnings were getting better.

01:04:52.15
Cameron
That discovery went from smaller retail investors to larger retail investors to larger retail investors to pretty soon, they're presenting at investor conferences. They've got a history of two years of execution and improvement and they're becoming profitable.

01:05:07.04
Cameron
And then that opens up the next level of discovery, which is your small funds, your family funds and your smaller institutions. And all of a sudden they go from being incredibly cheap.

01:05:19.41
Cameron
I mean, this was this was like, a you know, of $10 million dollars market cap company that was producing $50 million dollars of revenue growing at 100% per year ah to, you know, they start to become fairly more fairly valued through that discovery process. And you can literally map it out where these different funds, these different larger investors, these different discovery process people discover the stock What now looks expensive to me, because I first looked at it at three and a half cents and it's now a dollar.

01:05:49.39
Cameron
Now it's got better liquidity. It's got a higher market cap and larger investors are buying it. It just keeps going higher and higher and higher and higher. So if you look at a a stock like NTG Clarity Networks, it was the perfect example of you know a human finding this undiscovered company that has hit an inflection point where they weren't a great company a while ago,

01:06:11.92
Cameron
They are a good company now, good and improving, and just finding that change and honestly investing anywhere along that change, because it went from 20 cents to just about $3, has made investors money and being open-minded enough to see that change and and not have those biases and and look at the numbers and look at the facts and avoid the biases and the fear.

01:06:35.65
Cameron
and to be able to model that out and then get that discovery process. I think, you know, NTG Clarity Networks, you could do a whole a case study post on that one, ah basically from three and a half cents to $3.

01:06:50.30
Cameron
Talk to me about that journey. And and that's a ah great example.

01:06:55.03
David Barbato
Nice. And what sort of business model were were they operating? So you mentioned they there they were operating in the Kingdom of Saudi Arabia. So can you give more clarity on that?

01:07:07.51
Cameron
So again, if we're looking at all stocks, you know something that's simple is preferred and something that you understand is preferred, right? It's not always required. There are exceptions to the rule, but typically I'm looking for something that if the share price goes up, I know why it's going up. If the share price goes down, I know why it's going down. If I can't get that, I can't build conviction.

01:07:28.60
Cameron
um So as far as different people looking for different products or services that they like or don't like, I feel like that's a very much a personal decision

01:07:28.76
David Barbato
Okay.

01:07:37.12
Cameron
on what people have comfort with in this case for ntg clarity networks it was brilliant and again finding that flexion point is they had workers in egypt and egypt previously was a large market and what they do is they do i.t services so a company that feels like it's behind the times it needs to get caught up with 2025 it needs to modernize its databases incorporate artificial intelligence and

01:07:54.84
David Barbato
okay

01:08:03.18
Cameron
you know do more with their data and and develop these you know other solutions with their with their software, they need to update it, but they can't do it themselves, they gotta hire somebody.

01:08:14.61
Cameron
NTG Clarity Networks was operating out of Egypt, the the reason their share price was so low is the Egyptian economy collapsed. And what NTG Clarity Networks realized is that, hey, we're right beside Saudi Arabia.

01:08:27.89
Cameron
We have similar cultures, similar values. We're very close. We have this Egyptian workforce that is really cheap because the economy has collapsed. And we have this other wealthy country over here begging for the services that we provide.

01:08:42.31
Cameron
So it was finding that opportunity at NTG shifted from, they stayed in Egypt, their workforce in Egypt, but now their revenue is coming out of Saudi Arabia. um Massive inflection point for them that's still currently growing to this day. And they've they're now close to five years of pretty significant revenue growth.

01:09:00.59
Cameron
And I mean, if you could have found them in in year one, and and held them to year five of significant revenue growth, like that's kind of life-changing money. But the the services, again, supply and demand.

01:09:12.41
Cameron
um High demand for these IT services in Saudi Arabia, low supply. You've got these companies coming in from America that have nothing in common with the the companies in Saudi Arabia, and NTG has been able to beat them out competition-wise um because of their culture, values, the type of company they are.

01:09:33.76
David Barbato
And why were they listed in Canada?

01:09:38.09
Cameron
Well, it's again, with some of these companies, you do have to be careful because you have to be open to change, but change is how a lot of the scams work. So, you know, a lot of the scams will take a company that used to be ah a gold exploration company. It's been sitting here doing nothing for five years.

01:09:54.42
Cameron
They'll take it over. They'll decide that now they're an AI infrastructure company and they they're going to change the world and they'll go from a one penny stock and they'll pay a bunch of promoters to go to a dollar.

01:10:05.62
Cameron
So you have to be careful. People are rightfully concerned of that type of change. It is a risk. At the same time, there are lots of companies that, you know, again, you have to be open to the fact that the that your best stock next year might not be a great stock last year, and it might only be okay this year.

01:10:26.57
Cameron
you're You're looking for that change, right?

01:10:27.05
David Barbato
Yep.

01:10:29.50
Cameron
if If the company has been great for 20 years, it's not a microcap anymore. it's It's a large company, forget about it, right? They're microcaps because they're tiny, they're tiny because they have challenges or something's changed.

01:10:42.67
Cameron
So like in the case with NTG Clarity Networks, just for one example, they were a Canadian company because they were actually servicing Canadian and American industries and companies back in the day.

01:10:54.35
Cameron
um large telecoms and enterprise companies in North America was their plan. the The problem with that is that so much competition, a lot of those were kind of slowly dying companies. They didn't want to modernize.

01:11:08.96
Cameron
So there was there was a low demand for their services and there was high there was high ah competition. So they they started out in Canada. That's why they're Canadian company. They started out in North America.

01:11:20.64
Cameron
They had a lot of people in management that were Egyptian. So they opened up some offices in Egypt and that worked well for a while until the Egyptian economy collapsed. Saudi Arabia is now attempt three.

01:11:33.72
Cameron
Right. um And people will choose not to invest in them because of that change. Well, they've failed before. Well, sometimes, you know, what's the cliched statement, right? How many times do you fail at making a light bulb before you finally invent the light bulb?

01:11:48.51
Cameron
Some of these companies in the microcap space, they fail. And you have to look at, did they fail because of, Inadequacies, negligence, is it a scam? Is management just incompetent?

01:12:00.27
Cameron
Or was those honest fails that they learn from, they change into something different and now they find success. There's so many companies like this, right? D-Box is another one.

01:12:12.55
Cameron
I looked at D-Box, I think six months ago, they make the moving seats at movie theaters. I don't go to movies. I don't like movies. The movie theaters look dead to me. I didn't think that it was a great type of company, but you look at now, arcades are making a comeback in North America.

01:12:29.16
Cameron
um They basically have a moat on their haptic seat technology. these There's all these potential revenue streams. They have a new CEO and a new CFOs talking about growth. Change, the company has changed.

01:12:40.79
David Barbato
Yep. yep

01:12:41.30
Cameron
It's up to us, to investors, to determine whether it's a good change or a bad change, but in the micro-cap space, you have to be willing to at least look at that change, try to get rid of your biases and misconceptions and look for the facts.

01:12:53.67
Cameron
And if that change is for the better, That's what I'm looking for. And so NTG Clarity Networks, they've they basically, ah shouldn't say failed twice, but they've they've had two situations that did not work for them.

01:13:05.83
Cameron
They are now in a situation that's working for them. Massive revenue growth, growing profitability, getting discovered by larger investors. um And the people that looked at this company back at three and a half cents and said, well, it failed in the past, so I'm not going to invest in it.

01:13:21.95
Cameron
That it was kind of the wrong decision. And the beauty of micro caps is even though it was a wrong wrong decision at three cents, you could have changed your mind at 20 cents. You could have changed your mind at 40 cents. could have changed your mind at a dollar.

01:13:36.31
Cameron
There's all these different, you know, entering possibilities. So, but that's another podcast.

01:13:41.79
David Barbato
Yeah, for sure. That's exactly what I was looking for. So I think personally, yeah I learn much more easily when when I hear practical case studies and i that I can go back and study and look what happened and maybe apply that model or blueprint to other ah cases and improve that pattern recognition over time.

01:14:05.57
David Barbato
um So and just to wrap up, I think there are those investors that become so good at this game that actually outgrow the microcap space. And I believe you're one of those. So ah when when you'll outgrow the microcap space, what will Cameron do?

01:14:28.16
Cameron
I won't. I'm moving more into the microcap space. I'm not outgrowing it at all. um It's a constant challenge. Like one of the misconceptions, another one, like I don't want anybody to listen to this and and think, well, this is easy.

01:14:41.85
Cameron
that's That's one of the big failings that people coming down into microcaps, you know, back to that lottery ticket, large investor who's coming down here to pick, they normally pick one microcap stock. It starts doing well for a while and they think,

01:14:54.13
Cameron
this is so easy, right? All I got to do is come down here and pick a tiny little company with a life-changing product and I'm going to make a fortune. It's not that easy. It does take time. It does take work. It does take the willingness to learn, the willingness to be wrong.

01:15:08.26
Cameron
I always say say to people, like, I'm never outgrowing this place. um I'm never outgrowing microcaps because I always say that having a plan is better no plan.

01:15:18.98
Cameron
And what you what you find happen is you make a plan, you're 99% wrong. You learn, you correct. You make another plan, you're 98% wrong. You make another, right? And you go through that progress where you're always making mistakes, you're always wrong, but you start building these plans, you start building these strategies that are now mostly correct.

01:15:39.19
Cameron
And once you can start doing that, that's when you make money in this space.

01:15:39.38
David Barbato
yeah

01:15:44.10
Cameron
um In saying that, I'll never get bored of it. I'll never leave because it's constantly changing. Again, this new AI quant strategy is going to beat me is just a new challenge in 2025 where i'm I'm more fired up today than I've ever been, right?

01:15:59.74
David Barbato
Mm-hmm.

01:16:00.21
Cameron
and things are changing. Industry is changing. We have these new companies coming up with these new products and new technologies. I mean, if you are, warned people that if you're too trusting of a person, you should probably stay away from microcaps.

01:16:13.99
Cameron
If you are an inquisitive person, if you are a curious person, a personality that likes learning about new stuff, this is the place to be. And that's who I am, is that new companies all all the time, new technology, new space, now with ai now with data centers, now with crypto thrown into the mix.

01:16:32.06
Cameron
There's so much to learn. there's There's so many new opportunities that didn't exist a couple years ago. So I'm definitely not outgrowing it. Like we don't, we can't outgrow our advantages in this space. Like let's say, okay, I moved to small caps.

01:16:46.18
Cameron
small cap stocks, they they have discovery. Now I'm competing with institutions who again have more time than me, more money than me, more resources than me and more information to me. that The companies are calling the institutions, they're not calling me.

01:17:00.95
Cameron
Like I lose all my advantages. The second I move out of micro caps, most of my advantages are gone. And I'm just like every other investor, you know, putting in the time, putting in the effort, but basically rolling the dice and taking a gamble.

01:17:13.33
Cameron
um With micro cap stocks, our advantages of, you know, if I'm large enough, and you can email the CEO and get replies. Some cases you could phone the CEO and have a conversation. You could be influential in this space. You could find these misprice opportunities that that make you money.

01:17:30.68
Cameron
And in new industries, interesting industries with good management teams that you have a connection with, um Our advantages are here. And so it would be absolutely crazy of me to leave all these advantages and go do something else.

01:17:46.54
David Barbato
Sure. And actually on on the topic of connecting with the management teams, maybe that's something we didn't spoke too much about during the conversation.

01:17:57.33
David Barbato
ah But what sort of your strategy or or if you had to teach an investor how to fish and how to find these conversations and get in touch with ah the management teams, what would they what you tell them?

01:18:12.06
Cameron
Well, normally it's not too hard. I mean, start with an email, put some effort into it write it like a real person. Don't try to pretend to be a financial advisor. um Most of the micro cap management teams are happy to get back to you. Most of them have contact pages that you could go to and write to them directly on there. So you're not sending an email.

01:18:31.92
Cameron
Uh, It's typically, I wouldn't say it's easy, but it's possible in the micro cap space. Nowadays, I'm not sure if you need to so much. there' there's There's more and more companies now that are doing CEO interviews that are becoming more proficient with social media, that are doing more earnings calls.

01:18:49.07
Cameron
So, I mean, if you get a company that's doing an earnings call every three months and maybe a CEO interview with a larger platform like Small Cap Discoveries, That's probably enough. i don't I don't know that I need to contact them um in other situations, but it is possible.

01:19:00.10
David Barbato
Yep.

01:19:03.87
Cameron
And, you know, the nice thing is, is that, you know, there's multiple ways to win in microcap stocks. And and another thing is that there are quant investors in this space that only focus on the numbers that make money in microcaps.

01:19:17.38
Cameron
There's qualitative investors that mostly focus on management teams and people. and connections and competence and they make money in that space so you have this at least you have options in micro caps you're not phoning the nvidia ceo and getting an answer you can you can choose to be a qualitative micro cap investor and potentially make money where you speak to management teams you watch ceo interviews you show up to investor conferences

01:19:21.21
David Barbato
Yeah.

01:19:28.40
David Barbato
yeah

01:19:43.79
Cameron
There's two coming up this year, September 29th and 30th, Small Cap Discoveries Conference in Vancouver. And I think it's October 21st and 22nd. Planet Microcap in Toronto, Canada has another conference.

01:19:56.60
Cameron
There's multiple investor conferences every year that you could attend and you can meet these CEOs in person and have one-on-one discussions with them. So at least in in the Microcap space, you have the whole range of options of what type of investor you want to be.

01:20:13.35
Cameron
and tailor it to what works for you. Because again, what works for me doesn't necessarily work for you. I don't know your skills, your experience, your competence. You might be better off being a quant investor just looking at the numbers.

01:20:24.83
Cameron
You might be that person that is good at judging personality and body language and you know building those skills when you have conversations and you want to invest in management teams.

01:20:31.48
David Barbato
Yep.

01:20:35.77
Cameron
in Neither way is wrong. there's There's no wrong way here. um

01:20:39.75
David Barbato
no

01:20:40.32
Cameron
What we have is options and and what one is best for you.

01:20:44.67
David Barbato
Yeah, I think that's the beauty of investing is that you can, there's like thousands and thousands of ways to make money. You just have to find the one that works for you. um So in that sense is very democratic.

01:20:58.77
David Barbato
And as long as you're good in your analysis and you have the right strategy in place that works for you, then ah you should be able to to make good money. um Yeah, Cameron, this was a wonderful conversation. i had a lot of fun.

01:21:13.97
David Barbato
I learned it a lot. So I'm just very grateful for your commitment ah to my audience and I. And yeah, thank you so much.

01:21:23.49
Cameron
Well, thanks for having me on. Congratulations. I know how challenging it is to make content and and do videos like this. So good work. Keep it up. We need more people like you in this space talking about it, putting, putting the light on this space for us. So thank you for the opportunity to do that where, you know, micro caps do exist. There are people here making money in it and they're not all scams that this is ah

01:21:47.70
David Barbato
if

01:21:48.19
Cameron
a great place for retail investors to be. And anybody that's willing to talk about that, that's I've got the time for it.

01:21:55.41
David Barbato
Nice. That's a wrap. Okay.