Sam Namiri - Understanding How to Value a Company

Narrator 00:00:04 --> 00:00:32

Welcome to Compound Ideas hosted by Ken Majmudar 

of Ridgewood Investments this podcast will feature  

exceptional individuals to uncover deep insights 

into business, entrepreneurship, personal growth,  

investing, and multi-disciplinary thinking. 

So you can learn how to improve your finances,  

find better investments, and pursue 

authentic lifelong growth, wisdom,  

and happiness. Learn more and stay 

up to date at Compoundideasshow.com

Ken 00:00:35 --> 00:01:14

In this episode I speak to Sam Namiri 

co-founder and co-portfolio manager of  

the Ridgewood Select Value Fund a focused fund 

that concentrates on investing in publicly traded  

small and micro-cap companies. 

In our wide-ranging conversation  

Sam and I talk about his upbringing as a 

Persian growing up in the Los Angeles area  

his experiences starting and running a successful 

business while still in college and his journey  

to becoming an investor focusing on small and 

micro-cap businesses and how these experiences  

shaped and continue to shape his approach to 

investing today. I hope you enjoy our conversation  

Ken 00:1:16 --> 00:01:18

thank you very much Sam for being 

here

Sam 00:01:18 --> 00:01:20

hi Ken thanks for having me  

Ken 00:01:20 --> 00:01:30

so Sam let's just start out I'd love to hear a 

little bit about your background like how you  

grew up where you grew up just to set the stage

Sam 00:01:30 --> 00:02:22

sure let's go back all the way to early so I'm  

a son of immigrants my parents came to the U.S. 

from Iran in their early 20s they were both and  

went to USC my dad went to USC and my mom also 

joined him there from there right after my parents  

graduated they had me I was born in LA grew up 

in Santa Monica went to public school throughout  

and ended up going to UC Berkeley afterwards 

and so that's kind of my background in terms of  

where I'm from my dad is an architect slash 

developer so that's shaped me quite a bit  

as well like learning from him and he also manages 

and owns real estate in combination so he kind  

of is vertically integrated I like to say when it 

comes to real estate and my mom was an accountant  

slash bookkeeper part-time and raised both me 

and my sister growing up so that's kind of my

background

Ken 00:02:22 --> 00:03:16

yeah great well our show is about ideas 

and about sort of multi-disciplinary thinking  

and I personally believe that everybody's 

exceptional in some way if you could just sort of  

get the stories of their life arc out of them 

and that's sort of what a lot of what we're  

going to try to do not only today but with all 

of our guests so I'd love to hear I mean just  

probably a little bit more what you said I mean 

obviously Los Angeles is one of the great cities  

in the world what was it like being an immigrant 

sort of growing up in Los Angeles and I don't know  

if you mentioned this but you're Persian right 

so I know that there was a whole lot of people  

that probably in around the same time frame left 

Iran I guess that was sort of late 70s early 80s  

what was it like both being in LA and Santa Monica 

in particular in growing up in that milieu but  

also being in the Persian community growing up in 

LA

Sam 00:03:16 --> 00:06:07

so a lot of Iranians left after the revolution  

or during it in 1979 so there was a huge migration 

just anywhere outside of Iran especially if you  

were not Muslim then you for sure were trying 

to get out and so fortunately my parents left a  

little earlier because again my dad got accepted 

to USC and he left then and his brother had left  

earlier before that so that's kind of how they 

were able to get out I have stories from aunts  

and uncles though who had a much much tougher time 

getting out they had to cross borders by land and  

get flights from other cities that's a whole 

interesting conversation on its own in terms of  

LA, LA is kind of dubbed as Irangelous or 

Terrangelis as the capital of Iran so there  

definitely is a huge Persian community out 

here I believe some estimates I looked at  

recently was around a million Iranians or 

uh don't quote me on that but a good amount  

and so growing up I'd say probably until sixth or 

seventh grade it didn't really hit me as to like  

what I was in terms of cultural religion like 

I just considered myself American and I spoke  

another language at home but other than that 

like there wasn't really many Iranian families  

or other students in my elementary school if there 

was I just we all blended in together with the  

rest of them we didn't have funny accents we all 

grew up speaking english it was more just like the  

foods we ate at home were a little bit different 

and then I'd say once we I got into middle school  

I don't know if it was natural what it was but 

a lot of the Persians and Iranians I became very  

close friends with a group of other ones and a big 

group of my close friends were Persian and Iranian  

and so there was a big community outside of 

that that I had of family friends that were  

pretty much all Persian but I don't know how much 

it truly shaped me there was a few incidences I  

had as a child that were racial based like where 

people would call you funny names or you know  

I remember my dad would get into like arguments 

with people like at a tennis court one time  

where someone was rollerblading on a tennis 

court and you know he gave like a racial slur  

he called my dad like a camel jockey or something 

of that sort and so outside of that and then kids  

always play games with each other but I didn't 

really have too many issues 9 11 in terms of  

any racial bias like didn't did I didn't 

really feel like it affected me very much  

I think I was still too young I pretty much grew 

up I feel like an American I don't think it really  

shaped me too much in terms of how I think or how 

I was treated I think the biggest thing for me my  

religion I'd say probably shaped me to some degree I'm

Zoroastrian which is an extremely rare religion  

It's the oldest monotheistic religion that exists 

that still exists and there's three tenants there  

good thoughts good words good deeds and that's 

pretty much like what you're supposed to live by  

and I think that's a great thing to live by and 

I think that shaped me a lot in terms of just  

having good morals I think that's very important 

I'd say that probably shaped me more than anything  

Ken 00:06:07 --> 00:06:40

that's really interesting yeah a lot of people 

don't know about Zoroastrianism I happened to  

when I was really young take sort of a survey of 

religion classes I think in high school and that  

was the first time I ever heard of it so that's 

really fascinating how did Los Angeles shape you  

growing up in Los Angeles specifically then and 

the other thing I'd love for you to just touch  

on that many of our listeners may not know 

so I think the Persians overall even though  

they're immigrants became quite successful so I'm 

curious if you have any observations on sort of  

how and why that happened

Sam 00:06:40 --> 00:09:11

I think a lot of it is 

education is extremely important the Persians and  

I think they have the most like per capita I 

think highest PHD percentage in the U.S. is Iranian  

Americans and so I think that's one aspect of it 

like a lot of the founders of companies like ebay  

media east Persian there's a lot of technical 

education that's very focused in the Iranian  

community I think that's one of the the main 

things the other thing is I think entrepreneurial  

spirit i think that's big with a lot of Persians 

they don't want someone else kind of telling them  

what to do they're controlling them and so I think 

that's one aspect that I'm not sure if it holds as  

much in the current generation but in the older 

generation let's say my parents that was like a  

big thing is I think a lot of it was shaped due to 

the government that where they came from and the  

reason why they fled through the revolution was 

because the government was like going to tell them  

exactly how to run their lives so I think that's 

a big aspect of it in terms of Los Angeles shaping  

me I'd say I mean it's a big city so there's 

different parts of the city and I think for me the  

biggest thing was there's two aspects the first 

thing was the fact that I went to public school  

and at public school there's a huge wide range 

of people from different economic backgrounds  

ethnic backgrounds and such and so I think for me 

it allows me to pretty much be able to talk and  

get along with most people from most backgrounds 

whether someone who's low income I can talk to a  

lot of different people I played basketball a 

lot too and with playing basketball again like  

you kind of share that similar language where 

you can kind of again like and I was a big team  

leader like I was all about getting everyone 

together and making the most out of the team  

and I think that shaped me quite a bit as well 

too because again I can just especially when I  

get on the basketball court with other people it 

allows me to talk to them in a way where we can  

all feel comfortable and we can kind of build a 

trust and rapport like pretty easily and quickly  

I think that's probably the biggest thing that 

shaped me and then also living in a big city  

like LA you don't really do a lot of the things 

that kids do because they're bored a lot like by  

getting in trouble and doing you know things 

of that sort I think that somewhat shaped me  

as well too so when I went to college there were 

kids who came from small towns and they were just  

constantly doing things that were just like at 

the borderline of getting in trouble and I never  

really had that urge to really do that so I think 

I was just too busy there's too many things going  

on there's always something to do somewhere to 

go that I never really felt victim to that so

Ken 09:06:09 --> 00:09:23

and  

then fast forward I guess to college what was the 

college experience like i think you mentioned you  

went to Berkeley which is obviously a great school 

and what were the highlights in terms of how that  

shaped your experience and your next stage of your 

life that we're going to get to

Sam 00:09:23:29 --> 00:11:34

on the education  

side I'd say I never really needed to study much 

prior to college it was quite a shock when I went  

to my first class like multi-variable calculus 

class for instance at Berkeley more physics  

and everyone studied very very hard for every 

single test in high school that wasn't the case  

so it really forced me to like really truly hunker 

down and really need to study and truly master  

something because everyone's going to get over 90 

on every single test on most the tests there but  

really it's everything was on a curve so the way 

to get an A was how do you get that one or two one  

of those one or two questions right that everyone 

else gets wrong and you really had to know  

everything down to a T and so that was the first 

time I really had to do that I didn't need to do  

that prior to that so that shaped me quite a bit 

and also I'd say the other thing that shaped me  

was really at Berkeley I think it's different 

at private schools is they really throw you out  

there and you're out there fending on your own 

a lot of people fail I think 10 of the freshman  

incoming class don't get past their first year 

and so a lot of private schools it kind of holds  

your hands as you're going through if you're 

struggling and at Berkeley they don't so that  

was also like very it helped shape me a lot in 

terms of having to figure things out on my own  

and get through things on my own and also I say 

on my own but I figured out how to get support  

as well too I started to go to tutoring I started 

going office hours and talked to professors these  

are things I probably never thought I would do 

going in and so I think that shaped me quite a bit  

in terms of education and then socially just going 

to a big school like that again I come from one  

city one small section in the world and it just 

opened the door up to people from Chicago people  

from northern California wow what a big difference 

between SoCal and NorCal when you just don't  

realize it while you're living in this bubble  

so in in southern California and so that shaped me  

quite a bit as well too like living in the dorms 

and also I was in a fraternity as well again all  

walks of life different races backgrounds 

areas of the country where they're from  

that was quite an experience

Ken 11:34:15 --> 00:11:38

what's the difference 

between southern and northern California since you  

mentioned it

Sam 00:11:38 --> 00:12:08

I mean southern California is a lot 

more about looks a lot more aware in terms of that  

I'd say like a little more Hollywood there's some 

language differences I remember a lot of northern  

California people say like hella or hecka a 

lot that was one big difference I found and  

how you're trying to go back 20 years those were 

probably the two bigger things I realized like  

style of music like even when it comes to like 

I'm a big rap and hip hop guy and the local music  

that comes out of each area is very different in 

style as well too

Ken 00:12:08 --> 00:12:10

nice so you're graduating now  

what did you major in

Sam 00:12:10 --> 00:13:18

I majored in industrial 

engineering and operations research so  

the story behind that was that I went in undecided 

and I was trying to figure out what to do and  

I've always been fascinated by business and I 

took intro to business and it just to be honest  

it seemed too easy seemed like kind of like a 

waste like this is kind of common sense stuff  

and I had some friends who were engineers and 

they were studying one was studying bioengineering  

another one mechanical engineering they're like 

you should look at engineering it's a great major  

and they're actually both their families came 

from the Los Alamos National Lab so they were  

very into the hard sciences I was looking through 

the pamphlet they had on engineering and I was  

going through the different ones and industrial 

engineering and operations research was one of  

the majors and I said oh a lot of fortune 500 

top executives study operations research or have  

a degree in operations research my dream as a kid 

after I realized I wasn't going to be the Lakers  

team doctor was to you know one day ideally be 

CEO of a big company and so when I read that  

in the pamphlet I was like oh this is perfect 

fit for me so I decided to do that and it was  

a great experience it really added a technical 

element to business and operations that I thought  

was missing from the traditional business major 

Ken 00:13:18 --> 00:13:28

I went to engineering school too and IEOR was  

quite a popular major there as well so what did 

you decide what were you looking at doing after  

graduating what did you think you wanted to do

Sam 00:13:28 --> 00:14:20

I actually started a business in the summer after  

my junior year going to my senior year I wasn't 

really going through the traditional job route um  

looking at job hunting I did a little bit of that 

but not much my heart wasn't really in it and I  

was really focused on growing this business which 

yeah fortunately for me ended up really taking off  

as soon as I graduated I actually had another 

job at an engineering firm that i had started  

right after graduating and there i was they kind 

of created a new role for me it was kind of like  

a liaison between uh the engineer because it 

was mostly electrical and mechanical engineers  

and they created like it was more like a business 

development position where I would go and kind of  

bridge the gap between the client and the 

engineers on the team but my business that I had  

my jewelry company that i started took off like 

the first month I was working an engineering firm  

and I ended up making more money that month 

than I would have working the whole year  

as an engineer so I you know get my notice pretty 

quickly after I started that job

Ken 00:14:20 --> 00:14:27

like any good Persian you were just jumped right into business 

huh

Sam 00:14:27 --> 00:14:30

Ken 00:14:30 --> 00:14:37

yeah yeah so tell us about that business and  

how did you get the idea and how did you end 

up sort of starting that while you were still  

in the summer between your junior and senior 

year of college

Sam 00:14:37 --> 00:15:37

yeah so I had a friend there  

who um we started the business together and he was 

telling me that people would bring gemstones over  

from Pakistan and they would sell it in the 

U.S and it would pay for their whole vacation  

in the U.S I was like seems interesting started 

doing some research into it and learned about the  

gem business the jewelry business and I realized 

wow there's like huge margins and there's so many  

different middlemen from the mine all the way to 

the end retail and so I was like hey let's scale  

that business let's do what these guys were doing 

to pay for their vacations and growing it even  

bigger so started doing that made some mistakes 

went to some trade shows learned more about it  

and really just like kept trying a bunch 

of different things until something stuck  

and ironically the first thing that truly stuck 

was we would just buy some wholesale silver  

rings and sell them retail on ebay and started 

doing that in the first christmas holiday season  

made a killing that year and so that's kind of 

how it really started

Ken 00:15:37 --> 00:15:38

well what year would that  

have been then and get into specifics because I 

think it's really interesting

Sam 00:15:38 --> 00:17:11

that was in 2005  

yeah the winner of 2005. I graduated in May and I 

was doing the business and then it was around like  

September October and I was like okay you know 

what this isn't enough for a living at the time  

and I need to get a job so that's when I ended up 

work getting started working at that engineering  

firm and I'd say in October we started selling 

silver jewelry and started selling really really  

well so I want to say like in that month I think 

we had the month of November we had around like  

three 250 300,000 in sales it was crazy I still 

remember I was working out of my parents like an  

extra room my parents house and we had jewelry on 

every single cabinet on this bookshelf that they  

had and we were buying more bookshelves all the 

time we were selling so much we couldn't even get  

the supply for it i was running around downtown 

LA in the jewelry district just trying to find  

silver jewelry that looked similar to 

the stuff that we were selling on ebay  

that we were pre-selling in advance of actually 

holding inventory and so that really was really  

a true test of operations figuring out how to 

ship things efficiently in massive scale and I  

say it was like $300,000 worth our average price 

point was $10 to $15 and that includes shipping  

so we were really selling a lot of quantity and 

moving a lot of quantity out so

Ken 00:17:02 --> 00:17:26

that's almost  

like lightning striking right like if you're a 

young entrepreneur you stumble onto something  

and suddenly you get just like a bunch of orders 

obviously it's hard to deal with but it's also  

kind of what you hope for so walk us through sort 

of what happened to that business where it evolved  

what you learned from that experience that might 

be helpful to others who may be in a business or  

thinking about it

Sam 00:17:26 --> 00:19:29

sure so I mean that was the 

first year ran that business for around five  

years or so and it evolved into opening a factory 

overseas at one point we had a factory in Pakistan  

that had 250 or so employees at one point and then 

we ended up contract manufacturing out of China  

and then also we developed and built the 

television show as well too that was uh at  

one point on DirectTV but we also used something 

called leased access which is really interesting  

that got us really really cheap airtime a lot 

of different markets mostly in the middle of  

the night and then I'd say what happened was 

after the financial crisis there was a ton of  

people selling online at the end of the day ebay 

was always our bread and butter even though we had  

a tv show that was very hit or miss and you really 

need a lot of scale to actually be efficient and  

profitable with a tv show because the production 

costs end up being so high and the transmission  

costs end up being so high unless you have like a 

satellite transmission then it doesn't really make  

sense like we were sending tapes to like different 

markets but once the financial crisis hit there  

were a lot of fake jewelry sellers really that 

were selling silver jewelry online especially on  

ebay and you can't compete with fake and so that 

was really one of the problems of that business  

that made it tough and then also I got into 

business school and when I went to business school  

I realized I never really loved jewelry it wasn't 

a passion of mine I wasn't really out there like  

trying to figure out oh what do people want 

like what's exciting for people that was more  

like data mining in figuring out like trying 

something out something sold great let's go sell  

more of it we can raise the price let's raise 

the price oh we can't sell this anymore let's  

let's stop selling it that was kind of what i mean 

I'm colorblind so when it comes to jewelry like  

I don't know what stones are what color 

they are so again just not a passion of mine  

and then when I went to business school I realized 

Columbia had a value investing program and  

I learned more about value investing and I was 

like wow this just really if I could do this for a  

living I would love to do this for the rest of my 

life and so that's kind of what happened ended up  

going to business school and going that route

Ken 00:19:29 --> 00:19:37

so did you go to business school while the business  

Sam 00:19:37 --> 00:20:42

was still around or the business ended and then 

you decided let me apply and go to business school  

the business was still around and I applied and 

I got in and then after I got in I was like okay  

it's time to either wind down the business or sell 

it couldn't really sell it because it was way too  

driven by constantly like finding good deals that 

was really the biggest value added that we had and  

yeah I think that's kind of it and I'd say one 

thing I really learned from that business is that  

when you run a business in a way it's a the 

jeweler business is a very bad business to invest  

in for instance it's very fragmented it's very 

competitive no barriers to entry it's very very  

difficult like it's really a race to the bottom to 

some degree unless you have a brand and a brand is  

very very difficult and expensive to build we 

never had a brand so I think I really learned  

that it's really difficult to run a bad business 

no matter how good you are and there's things out  

of your control like everything there's things out 

of control but like now when I look at businesses  

when I see characteristics of other businesses 

that have that that same characteristics of the  

jewelry business that I had I was like I kind 

of tend to shy away from it I'd say the biggest  

thing I learned was that don't be involved in a 

bad business you don't need to be

Ken 00:20:42 --> 00:20:52

so then fast forward now you're at Columbia business

school what was that experience like what were your

big takeaways there

Sam 00:20:52 --> 00:21:54

I'd say Columbia was definitely 

very different academically than Berkeley a lot  

more handholding if someone was struggling that 

helped you out quite a bit the admittance staff  

to teachers for me it was pretty easy relatively 

to Berkeley again academically what ended up being  

more challenging for me is I didn't come from a 

finance background and Columbia is a very finance  

heavy school and so I learned like how to build 

financial models while most other kids at school  

knew already how to do that coming from private 

equity or investment banking or consulting to  

some degree so for me it was that aspect of it was 

really good I got to learn from some of the best  

professors when it comes to value investing like 

people who are actually like running funds running  

big amounts of money things of that sort and 

then I had like a great group of classmates  

as well too like my network from Columbia is 

amazing some of the things that people have done  

or where they came from was just like spectacular 

I'd probably say that's the biggest value I got  

from business school was a combination of network 

and for me also figuring out a structured way  

to understand value I'd say those were 

the two big takeaways that I had there  

Ken 00:21:54 --> 00:22:04

okay so now you're obviously graduating with your 

mba and you have a probably many different ways  

you can go how did you think about what to do next

Sam 00:22:04 --> 00:23:24

in all honesty like for me I always had this like  

stigma attached or whenever I applied to a job at 

a large company they were generally like well you  

had your own business like why would you want to 

go work for somebody else and so that usually kind  

of again most people I talked to would always 

kind of give me that kind of excuse and I also  

was in the J Term so I didn't go through the 

traditional route of a business school where you  

have a summer internship and so for me at school 

in the summer and so again I couldn't go through  

a traditional internship program so I ended up 

looking for internships while I was in school  

and I had a few options this was the next January 

afterwards or sorry the fall after my first summer  

and I ended up talking to some people and every 

person I talked to was like hey do you know anyone  

in New York who's looking for an intern New York 

area looking for an intern I want to work just  

for the smartest person that I could find and 

so I ended up having a few options and I was  

looking at a few different hedge funds actually 

and one of them was a retail focus hedge fund  

unfortunately the guy just got back to me two 

weeks late but I ended up working at a fund across  

the river in New Jersey small cap value-based fund 

and I ended up interning there and then I ended up  

going full time after school so that's kind of 

how it started for me in the investment management  

world

Ken 00:23:24 --> 00:23:30:17

so tell us what your role was there what that

experience was like what you learned from it  

Sam 00:23:30 --> 00:25:28

it was really great because I would learn 

stuff in class but you don't truly learn things  

until you actually do it and you do it multiple 

times so for instance if I'm writing up a report  

on an investment for a class I'm maybe doing like 

two or three a semester or depending on the class  

just not that many but now at the fund I'm doing 

a lot more and I'm building out models and I  

just have a lot more time just to focus on just 

researching and just doing that type of work  

it really made me a lot better at being able to 

do it more quickly because of the practice and  

the iteration so in combination like at business 

school a lot of the times a lot of these other  

students knew how to do all these things and I 

didn't so I was learning how to do it while they  

were just like whipping out all these projects 

and papers and it really comes down to like an  

investment banking training program like they went 

through that the first like year or two years in  

investment banking these guys were learning how 

to use excel without a mouse and a keyboard just  

just using the keyboard and all the shortcuts and 

so you just see them was going super fast at it  

and I kind of started to get that a little bit 

while I was in business school I would say I  

kind of lost it to some degree like I don't 

necessarily do it as quickly or need to do  

it as quickly as I used to with experience you 

start learning you don't need to like make sure  

your model fully links everything together you can 

start putting estimates in certain parts of it but  

yeah I mean I'd say that first year working at the 

hedge fund I learned so much and then once I got  

past that learning curve you don't learn as much 

after that going forward but yeah I really like  

learned from just being in the office chatting 

with there was two other members of the team  

chatting with them all the time we'd be on a 

lot of conference calls together so just like  

learning from questions that were asked what are 

good questions what questions do I not like I'd  

say the one thing I really learned was how to 

get people to feel comfortable on a phone call  

you know before even seeing them in person because 

really that opens people up a lot more so when you  

ask questions they end up being more truthful and 

more honest so that was one thing that I thought  

was on the soft skills was very very valuable for 

me to learn that

Ken 00:25:28 --> 00:25:33

so just for the benefit of our  

listeners tell us what that technique is

Sam 00:25:33 --> 00:26:04

so really just trying to find some sort

of common ground whether it's someone you

know an industry you know company you know

kids whatever it is like  

just have someone talk about themselves and when 

they talk about themselves most people like to  

talk about themselves and so just start off there 

that really helps a lot if you don't do that you  

start just like grilling management as soon as you 

pick up the phone and talk to them that doesn't  

really create that sense of openness you want to 

make them want to help you in a way and so that's  

something that I don't always do but I try to be 

you know conscious of and to do if possible

Ken 00:26:04 --> 00:26:23

so and by the way you've always focused or I mean

you did there and then you still do today focus on

sort of smaller companies so talk about why that

happened was it just an accident because you ended up

at a fund that focused there or is there more to it 

than that

Sam 00:26:23 --> 00:28:16

I really started investing getting  

the stocks during the dot-com bubble this was 

like during dial-up internet days and there  

me and my friend Chris Lahiji would always just 

like be interested in these stocks we'd always  

go to yahoo finance during school lunch breaks you 

know recess and we'd always be interested in like  

learning about the next new story what's the next 

new technology out there that we can invest in  

that's really where it started for me the passion 

I've always kind of been doing it on the side for  

myself and my dad also kind of pushed me towards 

it to some degree as well too like he never really  

wanted me to get into real estate he didn't like 

certain aspects of it like the lack of liquidity  

and he didn't really ever see too much value in it 

to be honest he always thought that the cash flow  

the risk reward like wasn't usually that great on 

pricing when it came to certain deals that he was  

being offered and so he always ended up saying 

hey I have to build something to get that reward  

and so yeah he kind of was like hey you know 

let's see if you're interested in this and  

let's see if it's something you want to do but I 

don't think he ever realized that there's actually  

funds out there that like do this for a living 

he was more doing it as like a side hobby for me  

and so he gave me some money to invest when I was 

young when I was in high school everybody gave me  

a thousand dollars or so and I invested it for 

them and I did pretty well with it and one of the  

things that really struck me into why I wanted 

to go into value investing at business school  

was I would invest in for instance GM and GM 

would come out with earnings and they'd beat  

earnings and the stock would go down and I'd 

be like why does it make any sense like why is  

the stock going down and I really wanted to 

learn why and I couldn't figure it out why  

and so I was like okay maybe I can go to business 

school and understand truly how to value a company  

and maybe that'll help me understand why GM went 

down in that instance and so I remember that was  

very that really stuck with me quite a bit when I 

when I invested in GM and they beat and the stock  

goes down to that day the next day so

Ken 00:28:16 --> 00:28:50

I think it's actually interesting because I didn't

realize that because I think a lot of people like

especially in Los Angeles they've made a lot of

money in real estate just over time Los Angeles

real estate has done really really well people

were pretty much moving to Los Angeles for decades

and decades I don't know if maybe recently that

might have started to reverse or at least flatten

out but also I thought a lot of people in the Persian  

community including people like your dad I thought 

they really believe in sort of hard assets and not  

things like stocks and company investing so I 

didn't really realize that your dad had been  

the one that sort of was a catalyst for that

Sam 00:28:50 --> 00:30:23

I think it was it's changed for him also to some  

degree I think he still doesn't understand stocks 

very well and so he kind of still sees it to some  

degree as funny money but at that time I remember 

him telling me he's like I could have invested in  

Qualcomm and it went up 100x and I didn't or he 

sold it early I can't remember what it was exactly  

and I think like the emotions from that is kind 

of what pushed him to like say hey let's try this  

out see if there's something you want to learn or 

I mean he didn't especially even say that he was  

just like hey here's some money go play with some 

stocks like that's really what it was from him  

and for him I guess it was just funny money and 

so like he didn't know what he was doing so he  

was like okay might as well give it to you let 

you see if you can figure out what you're doing  

and so again it was just interesting to me 

and I've always loved the study of business in  

college that's what I wanted to do is I wanted to 

learn about business and how to run a business and  

be in the trenches of a business I'd say 

after running a business the other thing that  

how it shaped me is managing people is tough 

very very tough and you know dealing with  

scheduling with people being sick their personal 

lives things of that sort was something that  

it was really really difficult dealing with when 

I was running the business the jewelry company  

and I occasionally get the itch to like maybe I 

should start this business doing this or that and  

I go back to thinking about you know the day and 

day on struggle of just doing these simple tasks  

of managing people and I'm like you know the 

grass isn't always greener on the other side  

and so that's why investment management in my 

opinion is such an amazing business because it can  

scale quite easily and you know it's a lot of fun 

because you're always learning about new things  

Ken 00:30:23.040 --> 00:30:26.720

now did your dad ever change his view 

on sort of real estate versus stocks or  

Sam 00:30:27.280 --> 00:30:30.560

I think it goes back and forth I think 

the main thing that hasn't changed is  

my dad's a big cash flow guy and so he never 

kind of gives credit to like rising rents and he  

00:30:36.720 --> 00:30:40.720

doesn't really give credit he doesn't really like 

expect someone else to come in and buy something  

00:30:40.720 --> 00:30:44.240

at a higher price because my dad's a buy and 

hold kind of guy he never wants to sell and  

00:30:44.240 --> 00:30:48.720

California also has some characteristics in terms 

of property taxes that kind of incentivize that  

00:30:48.720 --> 00:30:52.080

as well too but yeah I think that's the biggest 

thing for him he's always like okay well if I  

00:30:52.080 --> 00:30:56.480

want to buy something well how much can I rent it 

out for what are the rents that are coming in and  

00:30:56.480 --> 00:31:01.200

I don't want to pay too high of a so I always mix 

up EBITDA multiples and cap rates I don't want to  

00:31:01.200 --> 00:31:07.280

pay too low of a cap rate and that I think shaped 

me quite a bit too when it comes to like investing  

00:31:07.280 --> 00:31:12.640

in equities because I'm similar in that way

Ken 00:31:11 --> 00:31:39

yeah just for those that may not know so the reference  

to with the California tax thing so I believe and 

you could correct me if this is accurate or not is  

that California has sort of a unusual system in 

that they don't actually change your assessment  

essentially until you sell it and you move so that 

way then that marks it to market so obviously if  

you just stay and you never leave at least on 

the residential side your assessment can stay  

as low as it was when you first bought the house

Sam 00:31:39 --> 00:32:07

yeah it's for everything not just residential  

commercial it can rise I believe by two 

percent annually a year the basis that  

your property tax is based off of like for 

instance my parents bought their house in 1987  

and they bought it for $300,000 and so I think 

the property tax value from then is like maybe  

they're paying like as if it's worth like $500,000

and now the value of their house is worth  

like over 5 million or so at least

Ken 00:32:07 --> 00:32:07

that's very unusual because in a lot of states it's just  

every 10 years or whatever number of years they 

reassess everything

Sam 00:32:07 --> 00:32:58

yeah so I don't know what it's  

like but do people move because of that I assume 

so because the reassessment brings up the property  

tax and maybe they don't can't afford it or don't 

want to pay it I'd say in California you'll see  

a lot of businesses for instance that own their 

buildings and the buildings are completely run  

down and you also question like would the business 

even survive if they didn't own the real estate  

they might as well just rent it out to somebody 

else they probably get better value out of it than  

running their business anyway yeah it's an odd 

thing they've actually been trying to change it  

a few times have been some props that have been 

passed or have been up to being passed and have  

been shot down more on the commercial side that's 

a little easier i think for voters to stomach  

but yeah I mean it's hard like it's definitely 

a different world when it comes to buy and hold  

in California because of that

Ken 00:32:58 --> 00:33:28

completely different 

system and actually I mean I guess you know it has  

pros and cons depending on where on the spectrum 

you are who you are great for the owners that  

have owned stuff for a long time but on the flip 

side I do believe that in some aspects it makes it  

hard to finance education in California at 

least in some districts and things because  

of the tax revenue that comes in but switching 

gears now you're at this hedge fund obviously  

you're working with a smaller team and you 

were there from what year to what year and then  

sort of let's bring it to the next thing after 

that

Sam 00:33:28 --> 00:35:20

sure I was there from 2012 to 2017 I believe  

so the fund I was at I think it was 2014 we were 

up around like 60 or so percent and I was like  

great this is amazing i think we were managing 

around 30 million or so at the time and for me  

as the number three person there it didn't really 

make sense to stay there unless we were able to  

grow let's say to at least 60 to 70 million at 

least 50 we had to cross a 50 million dollar mark  

and so for me after that year I thought we 

were gonna be able to raise a lot of money  

and we weren't like we didn't really raise 

much we probably raised two or three million  

at that point and so there I kind of saw the 

writing on the wall that at some point I need to  

start figuring out something else to do because 

long term this isn't the right situation for me  

so I think that's when this is probably 2016 I

started to think about what I wanted to do next  

and I was interviewing at a few different funds 

didn't really ever it was never a good investment  

fit and that was more because I never truly 

felt like I was actually able to get an edge  

or to provide like real value I kind of 

felt that with a lot of different strategies  

that they were doing you might as well just invest 

in an ETF or some index fund or some mutual fund  

and kind of get value you get most the value that 

way and it was just really hard to beat the market  

but I could see that it was much much easier 

and smaller micro cap land and so that's why  

my passion is there because I was like hey 

this is where I can really add a lot of value  

and so I ended up partnering with you I was going 

to go on my own route and launch a fund myself  

and then we met and I think we both kind of 

connected that we both see a ton of value in  

the space and by investing in the space and that 

we've both been good at it doing it ourselves and  

for me at the fun that was at and so made sense 

to kind of partner with you and do it together  

Ken 00:35:21 --> 00:35:45

for those who aren't spending all their time like 

you are in this smaller micro cap you mentioned it  

sort of hey you know you had potential to talk to 

an interview with big firms and they're probably  

focusing on larger companies and you didn't feel 

that you or they might really have had an edge but  

you do feel that there is sort of it's better or 

easier in smaller micro so talk about that why is  

that and where does that opportunity come from

Sam 00:35:45 --> 00:39:05

I think really the opportunity comes from it's not  

as followed not as well followed in the space like 

you'll see things where like a news will come out  

about another company for instance it's a huge 

customer of a micro cap company and you would  

expect that that would move the stock quite a 

bit for instance but it doesn't and you have  

to wait until the quarter comes out to reflect 

the results to show that the company you know  

is doing really well because their customer made 

a big order from them so like that's an example  

another one is most people who invest in micro 

caps most investors they're more like gambling  

with their money I'd say and so i think emotions 

and a lot of the behavioral biases that happen  

in large caps they happen to a lot more extremes 

in smaller microcaps so if a microcap company has  

a bad quarter it usually drops a lot more than 

a large cap company if they have a bad quarter  

and it just goes to a more extreme which again I 

think allows creates a lot more opportunity where  

if you actually see the value in the company and 

you're more longer term focused you can kind of  

get past that so there's a lot of like a lot 

of other things like a lot of these large cap  

companies there's like 15 or 20 firms that do like 

intense research on them small micro caps you'll  

be lucky to find like two or three depending on 

how big it is or how much M&A the company does  

so that's another example and yeah I mean I 

think just even the firms that do the research  

they don't have the resources they don't spend the 

resources to go visit companies in person to see  

their actual facilities or to meet people below 

upper management i have friends who are analysts  

at these small cap banks and they just don't do it 

they're like we don't have the research budget i'd  

love to but we're not a revenue driver of our 

firm and so yeah I mean that's really what it  

comes down to is that there's not much money to be 

made in terms of total dollars in smaller microcap  

whether you're a service provider even as a fund 

if you want to be the best business you can be  

it doesn't make sense to run a smaller 

microcap fund you want to be able to manage  

10 20 30 billion dollars and make fees off of 

that and so as a small micro-cap fund only managing  

maximum a few hundred million dollars let's say 

you've kind of put a cap on your limit and so I  

think that's another reason why there's advantages 

and another thing that's great is we can talk to  

management teams we can call the CEO of a company 

and they'll pick up I just recently spoke to a  

company that a lot of people have tried to speak 

with and they haven't spoken with anyone for like  

I'd say two years or so and I was able to talk to 

them why because I'm part of Ridgewood Investments  

and we manage a few hundred million dollars and 

so that allows me to talk to these companies that  

most other people aren't able to talk to and 

again when it comes to the bigger companies  

you usually don't have access to these management 

teams and so for me that's that's fun for me  

I love talking to them I love learning from them 

I learned things that you don't you can't read  

about in the news or an article again that's 

just very very fun for me and relating back to  

the jewelry time when I started that business I 

used to go to a lot of trade shows and I learned  

so much from every trade show I went to I mean 

I learned about the business by going to a trade  

show for the first time and I love doing that with 

investments as well too it's the same same thing  

I do I love going to trade shows because you can 

talk to company management teams all the time but  

until you talk to competitors suppliers customers 

you really don't get the true picture of the value  

of a company

Ken 00:39:05 --> 00:39:06

just to set a baseline for people 

because we talked about small and micro cap what  

does that mean as far as the size of companies and 

maybe the number of companies if you know

Sam 00:39:06 --> 00:39:38

I mean I don't think there's a set number but I

like to say micro-cap is below say 500 million or

so and small cap is below 3 billion in market cap

with some inflation maybe I've got a little bit higher

but those are the numbers that I would pick and then 

there's like a nano cap world which is maybe under  

two to three hundred million which I think is 

smaller you go usually you get much better risk  

reward opportunities

Ken 00:39:38 --> 00:39:45

and how many companies 

are there to pick from in contrast to say  

large companies or mid-cap companies

Sam 00:39:45 --> 00:40:05

it's probably increased quite a bit because in 2020

I think more  companies went public like in one year

versus the last like 10 years combined or something

of that sort but I think the last thing I saw was

North America at least there's around 12,000

publicly listed companies so I'd say that's

probably gone up to like maybe hitting 14 15,000

or so that number was from like 2017 and I gave

you the 12,000.

Ken 00:40:05 --> 00:40:13

yeah that might not be that high but  

I think what you're referring to is also there's a 

lot of S.P.A.C.S. that are coming out and then they're  

trying to find private companies and sort of 

take them public and directly that way

Sam 00:40:13 --> 00:40:28

yeah I mean there's S.P.A.C.S a lot of companies

are IPO Inc depends on the sector but there's just

so much some froth in certain sectors so that companies 

really want to get that valuation if you're a  

private company if you're a venture-backed company 

you're going public right now if you can

Ken 00:40:28 --> 00:40:46

so you referred to it you know we met and obviously

you wanted to start a micro cap fund so why was that  

and tell us about the fund and tell us about what 

your approach to that is now that you're running  

your own fund

Sam 00:40:46 -->00:41:10

yeah so I wanted to start it because 

for me personally I would do the same thing if I  

didn't need to work so it's just a passion of mine 

like I just see the value there I know it works  

i'm very confident that it works and it's 

just a lot of fun for me to do that and  

combination of just kind of not seeing anything 

else out there that seemed like a good fit  

so there's not a good fit for something you 

might as well just start something yourself  

Ken 00:41:10 --> 00:41:25

well what makes you know there are funds out there 

so what makes your fund Ridgewood Select Value Fund  

what makes it different than all the other funds 

and what type of investors would find that that  

fund is the right type of fund for them

Sam 00:41:25 -->00:43:59

so I think what makes us different is the fact

that we know we're investing in businesses and 

we're investing in shares of businesses  

and a real business we're not just investing 

in some you know stock ticker and price on a  

screen in some chart and so I think what makes 

us different is level of due diligence that we  

do we want to make sure that every company exists 

there's a lot of actually fraudulent companies  

in the micro cap space especially and then we 

want to make sure that we're right in terms of  

our future outlook and outcome and so we do this 

by just doing a lot of legwork and groundwork and  

getting out there like during normal times we're 

both traveling a decent amount you in particular  

and you learn a lot by that you can learn 

only so much by sitting behind a screen  

and learning and reading things you learn 

a lot by talking to people by talking to  

different people in different industries and 

understanding what's truly going on in the real  

world so one of the books i read during business 

school that was really influential on me is uh  

howard mark's the most important thing and he has 

a section in there that i found very fascinating  

and he was talks about how like news articles when 

you read them you really start thinking especially  

if you've ever been involved in something that's 

been covered by the news you kind of end up going  

that's kind of true but they're like missing a 

lot of aspects to it that are quite important or  

like quite like slant the story in one way versus 

another and so for me when it comes to investing  

world like you can read filings you can watch 

presentations you can go even talk to management  

but you really get the true story when you're 

out and talking to customers and all the other  

parties involved and so I think that's really like 

the value that we provide to our funds investors  

is that we do this work for them that helps skew 

the risk on investments and to understand truly  

hey like is the outcome we project is it more 

likely to happen or is it less likely to happen  

or how can we get it to become more likely to 

happen or how can we realize that it's more likely  

to happen we can't really be active and sell stuff 

for companies but yeah I think that's part of the  

value that we provide I think the other thing 

that we initially talked about when we first  

joined together was how do we charge fees right 

I think one of the big differences is most hedge  

funds charge a two percent management fee and we 

don't do that we think that just because someone  

has charged two percent for a long time doesn't 

make it right necessarily right so we don't charge  

two percent we charge one percent and we have 

a founders class that we don't charge anything  

to that's going to be closed up soon I think that 

helps make us difference as well too and then also  

you know we're both big investors in the fund both 

of our families have investments in the fund so  

we're aligned really really strongly 

with our investors

Ken 00:43:59 -->00:44:13

we obviously want to also share information that's

sort of generally applicable so say there was an

aspiring investor or micro cap investor out there

what kind of tips or resources would you point them to  

that could help them be more successful even if 

they wanted to do it themselves

Sam 00:44:13 -->00:47:06

it's a little tough because a lot of the resources

I got were from going to business school and then

also after I joined the fund you kind of start paying

for things that become just a lot more convenient  

there's just so much to investing in it's tough 

like so there's certain books that i can recommend  

to read when it comes to data like just go to SEC 

SEC website you can get filings from there that's  

a great thing to read there's a lot of youtube 

videos so there's a few things that i think are  

important for investing especially in the micro 

cap world it's important to understand accounting  

when you read the filings and you read the 

financial statements there's so many things  

in there that could cause a great business 

to still not have good value there's a few  

like community I can't remember what it was but I

learned so much about accounting from a community  

college professor that posted youtube videos and 

that was really really helpful in understanding  

things like if a company like an engineering firm 

for instance they have huge projects that are a  

few years old they do something called project 

accounting there's a lot of estimates in project  

accounting one of the things that I ask management 

teams when i dig deep into a company is how do  

you make these estimates how do you adjust the 

estimates how often you do so like walk me through  

for an example on one of your projects how 

you would make an estimate as to when you  

how you recognize revenue because in those 

instances they don't necessarily recognize revenue  

when the cash comes in or like it's kind of random 

how they recognize revenue it's like a percent of  

completion method and so they decide okay well how 

much more complete this project become during this  

quarter or during this year and it's all based 

off of those estimates it's not based at all as  

how much they bill or based off how much cash 

they receive so there's certain things like that  

that are I think quite important to understand 

and especially in the micro-cap space because  

that's where you can uncover a lot of aggressive 

management teams or frauds but even more simple  

than that i would read transcripts from companies 

I think that's a great source you can go to  

LDMicro.com it's a great resource to be able to 

get a lot of this information like the sec filings  

and other basic stats on a lot of companies 

a lot of microcap companies out there  

but what's interesting about micro-cap is 

that there's so many different ways to  

invest in it like you can be a story person 

where it's about the story of the stock  

you can be a valuation person where you're just 

trying to find cheap valuations of companies  

and I think ideally you end up being a mixture 

of both or both matter and so yeah I think that's  

those resources are good ways to start and to 

start looking at things i mean I could recommend  

some books maybe that are helpful that would be 

good to kind of help shape invest in frameworks  

really it just comes down to those like basic 

things and then there's also conferences that we  

intend to that i think is great that are opening 

up more and more to individuals to be able to like  

find and like see company presentations and 

even have meetings with companies as well too  

Ken 00:47:07 --> 00:47:26

yeah in fact since you mentioned the conferences 

obviously we both know Chris Lahiji you mentioned  

him earlier in the podcast you have a unique 

relationship with Chris so talk about LD Micro  

your what your involvement with that was talk a 

little bit about your relationship with Chris and  

obviously we met at Ld Micro the first time ever 

as well

Sam 00:47:26 --> 00:49:42

so Chris is he says I'm his best friend  

but he's one of my few good friends I'd say we've 

known each other from high school the way we met  

was actually we were on the tennis team together 

and we both came in as freshmen and we were both  

kind of like the one-two new freshman kids that 

were like battling to see who's going to be  

the best freshman incoming student and i remember 

playing against them and thankfully he actually  

woke me up that day and so he he is the better 

tennis player of us but yeah so that's how we met  

and we kind of stayed in touch he's one of my 

very good close friends from high school now  

and he went into finance and got just kind of 

stuck with it just his whole life we ended up  

starting LD micro I don't know maybe 10 years ago 

or so I can't remember actually how long it's been  

and so he started having these conferences 

I think the conference was 10 years old  

and I helped him with the first one a little 

bit um not too much and you know a few of  

the years especially just prior to business 

school I think the first like two years or so  

I helped them quite a bit in terms of getting it 

started and kind of getting it from one level to  

the next again I didn't spend too much time maybe 

like a week of my life like each year helping them  

out with organizing and getting the conference 

more on the operations side set up well and then  

he has kind of grown from there like he helped 

me get my internship with the phone that was at  

he had the relationship there yeah I mean 

I think that's really the big thing and so  

now I sit on the table at a lot of investor 

meetings at his conferences and I give him like  

feedback you know as a true loyal person who has 

his best intentions at heart and I try to be as  

straight as possible with him and tell him what 

I like and what I dislike about the conference  

and he recently just sold his conference 

business as well too and so now he's a  

board member at a public company but yeah I mean 

that my relationship is like very close with him  

I probably see him like once a month or once every 

two months in person we have dinner or spend a day  

together one thing we do usually every year more 

recently is we go to CES in Las Vegas that trade  

show together we'll fly in hang out that day and 

go around and go through the whole convention walk  

a lot see a lot of people have a lot of meetings 

and then come back that evening I don't have that  

relationship with many people and so he's one of 

them he's at the end of the day he's one of the  

nicest like most generous people I've ever met in 

my life and those are the type of people I love to  

have as good friends and so he's definitely one of 

them

Ken 00:49:42 -->00:49:42

that's great and for your fund what type of  

investors are you looking for as far as whatever 

the criteria would be a good fit for the fund

Sam 00:49:42 --> 00:51:11

the best fit historically for me in terms of this 

investment style has been people who have their  

own businesses or at one point about their own 

businesses and they understand that there's real  

value in owning a business being the owner of a 

business and they also understand that you can't  

judge the value of a business over a quarter 

or even a year it's over longer periods of  

times that you can really extract value out 

of businesses and you can really grow a lot  

of value and wealth out of it as well too so it's 

a passive way to grow your wealth and so i usually  

find people who understand that and understand 

valuation are the ones who are the best fit who  

understand it's for the long term at times where 

things are bad in the micro cap space the whole  

sector is probably usually worse I'd say in uh 

during the Covid times the performance of the fund  

didn't do as well and was a lot more volatile and 

down a lot more than the rest of the markets but  

that's because the baby gets thrown out with the 

bathwater and so our investors the best investors  

understand that and they're not panicking during 

those times and understand that you know most of  

our investments aren't solid businesses that'll 

make it through to the other side and it'll end  

up being better on the other side I think it's 

more the best investors are the people who have  

money saved up and they're able to withstand that 

type of short-term volatility in their temporary  

net worth

Ken 00:51:11 --> 00:51:21

and if somebody is a long-term oriented 

investor and they do have enough money what  

percentage would you say would be appropriate to 

put into something like a micro-cap type of a fund  

Sam 00:51:21 --> 00:52:22

I think you're asking the wrong person I think 

uh for me personally because this is something  

I'm very confident in I would probably say 

higher percentage than what what they act in  

reality should have personally for me I'm very 

very overweight and small and microcap fun  

in the small microcap fund in terms of my own 

personal investments but I don't know you probably  

have a better sense maybe I think it depends 

on the level of wealth i think matters because  

then there's two things I think I don't like to 

look at it as a percentage I'd say I'd look at it  

more as like someone's behavior or mentality or a 

risk aversion or I wouldn't say risk aversion but  

more volatility aversion not many people could 

stomach the volatility that bitcoin has been  

doing recently and there's other people which 

I assume like yourself who doesn't really even  

look at it every day who owns a bitcoin and so 

I think someone who can stomach the volatility  

I think is someone who can put a higher 

percentage of their net worth let's say in  

microcap but I don't know maybe like 15 20 or 

so

Ken 00:52:22 -->00:52:30

with the idea that obviously the reason to  

stomach the volatility if you can is that 

presumably over time you get rewarded for it  

Sam 00:52:30 --> 00:53:04

yeah but I mean there definitely isn't some stuff 

that has volatility that over time ends up worth  

nothing the interesting thing like a lot of like 

theoretical finance sees volatility as risk I  

kind of look at it a little differently I look at 

price as risk if something has gone up in value  

and the fundamentals haven't changed to me that 

becomes more risky and so if something's gone down  

in value and there's like certain assets behind 

it to me that's not that risky so even if it just  

goes down really quickly or if it goes down over 

a slow period of time that doesn't matter to me  

like the assets are the assets

Ken 00:53:04 --> 00:53:04

yeah I think what you meant is if the price goes

down then the value  

is not going to go down as much so therefore it 

got less risky

Sam 00:53:04 --> 00:53:05

yeah yeah

Ken 00:53:05 --> 00:53:23

and yeah I think a lot  

like that as well so that's great thank you for 

the information on that and obviously if somebody  

wants to get in touch with you or want some of 

your recommendations on books or things how would  

they contact you what's the best way

Sam 00:53:23 --> 00:53:36

yeah they 

can email me at sam@ridgewoodinvestments.com  

you can follow me on twitter @snamiri is my handle 

and yeah I think that's probably the two best ways  

to get a hold of me

Ken 00:53:36 --> 00:53:51

just to kind of close out 

the interview I'd like to ask everybody um  

to share sort of what person or experience 

it could be one or could be more than one  

it could be a book or something that had 

the greatest role in shaping the person  

you've become

Sam 00:53:51 --> 00:56:09

my wife would probably be 

upset and she is upset that I read this  

book but there's a book called The Game and it's 

about pickup artists and how to pick up on girls  

and that book I read it when I had the jewelry 

company and that really influenced me and not  

at all because you know I was actually in a 

serious relationship with my now wife at the time  

but it was more that it really taught 

me that humans are wired a certain way  

and that you can take advantage if you need to 

be or you can play a certain game which is why  

it's called the game where you can put the odds 

in your favor when I read that book really  

changed my mind in terms of understanding that 

humans are wired in a way and it's really never  

going to change so I think that that's shaped 

me quite a bit in the combination of the jewelry  

company also like myself like understanding 

hey I have these certain biases myself and  

sometimes you catch them and sometimes you don't 

and then figuring out processes that make you be  

able to function better to avoid those biases but 

again just that book itself and then I had friends  

we would just kind of play games and see like hey 

like this certain things do certain things work  

do stupid things not work same thing that happened 

with the jewelry company I was like you put out a  

marketing you start marketing a certain way does 

it work does it not work and you realize that  

certain things consistently work even if people 

know that they're being played that's the thing  

like even when people know they're being played 

you can almost turn it in a certain way where  

it still works so like there's certain things 

there again that book had its own strategies  

and some of them are like borderline sketchier 

not morally as correct but again that book just  

like changed the way I thought about like human 

psychology and how propaganda can be done I think  

I read somewhere that propaganda historically was 

actually a positive term back when that term was  

made and it was made by I think ford came up with 

that term when they were mass marketing initially  

it really is about like how do you grab people's 

innate instincts and kind of have them do what  

they actually want to do from internally 

instead of trying to convince somebody to  

do something it's a very different way of I guess 

like marketing or negotiating with someone so that  

book was really a big one for me I'd say another 

one was Sapiens which is kind of a similar realm  

in terms of understanding human behavior and 

psychology

Ken 00:56:09 --> 00:56:16

well Sam thanks for a fascinating  

discussion we really appreciated having you here 

and hopefully we'll get a chance to talk again  

Sam 00:56:16 --> 00:56:20

yeah hopefully we'll be able to fly and see each 

other soon

Ken 00:56:20 --> 00:56:21

yeah

Sam 00:56:21 --> 00:56:24

take care bye-bye

Ken 00:56:24 --> 00:57:07

thank you for listening to this episode I hope

you enjoyed my conversation with Sam Namiri some

of my biggest takeaways from our conversation

included the Zoroastrian principle of good thoughts

good words and good deeds the importance of getting

people to feel more comfortable before having a

conversation about business the challenges that he

experienced managing people as an entrepreneur and

the contrast between being an entrepreneur in an 

operating business versus being a fund manager in  

an investment oriented business I was also struck 

by Sam's insights on why micro-cap investing is  

such an attractive place to look for opportunities 

and generate higher returns

Narrator 00:57:07 --> 00:57:44

thank you for listening to this episode of

Compound Ideas hosted by Ken Majmudar of

Ridgewood Investments connect with Ken learn more

about the show and never miss an episode at

Compoundideas.com Ken Majmudar is the founder of

Ridgewood Investments and several other affiliated  

companies all opinions expressed by Ken 

and podcast guests are solely their own  

opinions and do not reflect the opinion of 

Ridgewood Investments or any of its affiliates  

this podcast is for informational 

purposes only and should not be relied  

upon as basis for investment decisions 

clients of Ridgewood Investments and  

its affiliates may maintain positions in 

the securities discussed in this podcast