Joe Kaye
Person
Joe Kaye is a microcap investor known for researching small companies and specialized market niches.
What Joe Kaye has said on podcasts
21 statements
Joe prefers high-quality businesses trading at cheap valuations.
“I actually want a really high quality business that's trading cheaply.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 8:48
People can find time to pursue investing alongside an existing career.
“I think you can always find time in a career and life.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 12:10
A standalone investment fund generally needs at least $10 million in assets to consider launching.
“I think you need at least $10 million of assets under management before even thinking about it, 'cause really they want to get you to $20 million to make it feasible.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 16:00
Joe defines a concentrated portfolio as ten or fewer positions.
“concentrated for me means less than 10 positions or 10 or less.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 17:16
Seven stocks provide the greatest diversification benefit, according to Joe’s cited study.
“having 7 stocks is like where you get the most benefit of diversification.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 17:49
Joe prefers allocating more capital to ideas with the lowest perceived downside.
“I would prefer to allocate much more to my best ideas where I feel like the downside is lowest”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 18:11
Highly concentrated portfolios can produce outsized returns by maximizing winning investments.
“if you want to try and maximize your winners and basically swing hard on a fat pitch, then I think that's the way to make outsized returns.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 18:34
Joe seeks large positions trading below ten times free cash flow, ideally near six times or less.
“I'm looking for like under 10 times free cash flow, but like hopefully closer to 6 or less.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 20:46
A stock cheap on trailing earnings may have unpriced future growth.
“if it's trailing 12 months, it's cheap on that basis, then the growth isn't priced in”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 21:47
Joe prefers businesses with no leverage or net cash positions.
“I'd like very low leverage. So ideally no leverage, and even net cash is pretty good”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 22:47
Joe prefers companies operating in industries with strong growth tailwinds.
“I want to be in a tailwind. I want to have an industry that's in a big strong tailwind.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 23:21
Market leadership in a small niche can create stronger competitive advantages.
“I much prefer a small niche. Market leader in a small niche has got a way stronger competitive advantage.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 23:58
Higher operating margins indicate pricing power and competitive advantage.
“the higher operating margin gives you a real indication that there's real pricing power there.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 25:28
Consistent revenue indicates a sticky customer base and dependable demand.
“consistent revenue really shows is that you've got a sticky customer base.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 26:32
Management quality and insider ownership are crucial investment criteria.
“quality of management is super important and also having alignment with management with skin in the game.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 27:43
Recognizing and counteracting personal biases can give investors an advantage.
“if you can be aware of that and aware of your own kind of thought process and stuff, then you, I think you have a big edge over the majority of investors”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 35:14
Investors should avoid buying stocks that are rapidly declining.
“definitely not buying falling knives is another thing.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 39:34
Qualitau traded at 6.5 times cash-adjusted earnings when Joe found it.
“it was trading at 6.5 times cash-adjusted earnings.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 41:47
Joe initially allocated 30% of his portfolio to Qualitau.
“I put 30% of my portfolio into it at the start at cost.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 44:35
Investors can make concentrated initial bets but should trim as valuations and recognition increase.
“you can make really big concentrated bets at cost, but you need to start trimming as the thing grows”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 45:39
Businesses with leverage and meaningful bankruptcy risk should not be large positions.
“you can't make a business that's got leverage and real chance of bankruptcy a big position.”
Open the episode · Club Conversation with Joe Kaye, Small Niches, Big ReturnsListen at 56:06
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
