Old-Fashioned Stock-Picking for Modern Markets
November 11, 2025
From the Editor
PLEASE NOTE:
- Any discussions or information shared in this conversation about stocks or potential trades are for informational purposes only and should not be construed as investment advice.
- Before making investment decisions, individuals are responsible for their own research and consulting with a qualified financial advisor.
- We, or our affiliates, may have positions in the stocks mentioned, potentially influencing our opinion.
- You should not buy equities unless you are prepared to sustain a total loss of the money you have invested plus any commission or other transaction charges.
No surprise here. The small-cap market has indeed erupted, and seems to have taken the hyper-inflationary hedge torch from crypto-currency and perhaps even AI stocks. Earnings reports have generally helped, but you can discern the general tailwind.
Followers will remember from our first couple blogs our ruminations on market-maker manipulation in stocks of all shapes and sizes reaching unprecedented levels culminating in the great small-cap shake-out witnessed earlier this year. I would be remiss if I didn’t peg the action in DigitalOcean (DOCN) as a fabulous example and perhaps proof positive of what I am trying to teach you guys. This AI company was always gonna be a $2+ eps earner, as they were already earning at that kinda clip, yet the stock mysteriously crumbled from $45 to $26 and a fraction of the price/sales ratios commanded by companies (CoreWeave, Inc. – CRWV, and many others) that had had gone public more recently. We believed the stock was under accumulation every step of the way once it got below $33, and surely enough, the stock has erupted on a slight earnings beat and several sudden Wall Street buy recommendations. Where were these idiots at $32? It’s a big game and again, YOU HAVE GOT TO KNOW WHAT YOU OWN OR THE MARKET-MAKERS WILL SHAKE YOU OUT!!! DigitalOcean was and is one of the few profitable AI pure-plays and the discount to the others was not in this opinion explicable by its top-line growth rate of “only” 14%.
Idea! If you like the space, build your own mini-industrial/infrastructure index with cheap stock such as Broadwind (BWEN), Kennametal (KMT), Materion (MTRN), Minerals Technologies (MTX), Stratasys (SSYS), and Twin Disc (TWIN). Thank me later…
Also, take a look at Health Catalyst (HCAT) and compare it to the price paid recently to take Performant Healthcare (PHLT) private. Quite a valuation gap…”just sayin”.
In Closing
*The Dinosaur* doesn’t roar, it rumbles quietly, patiently, confidently. When the tide turns—as it always does—those who held to discipline, valuation, and patience will be well rewarded.
Until next time,
—The Editor
