[kevstev]

One big hole in his claim is that a real problem for successful, and really all hedge funds to some extent- is scale. Yeah you might find a microcap out there that looks great but if the ADV on it is 100,000 shares with a <$200M market cap, its going to be really hard to invest a significant amount of money into it if you have even $100M in assets under management (which is considered to be a small fund).

As an individual with orders of magnitude less in funds, there are a lot more opportunities out there picking up the "pennies" that the bigger guys are just too big to get into. I have a strategy that mostly picks up small and microcaps, and have had market beating returns since I have run them the last 4 years. I can't find a reference to it now, but Warren Buffet in an interview talked about some of the ways he could easily invest up to a million dollars and have a margin of safety that should easily allow him to beat the market. The closest thing I could find describing it is this: https://valuebin.wordpress.com/2011/01/27/warren-buffett-on-...

This link, while it doesn't go into the methods, at least directly quotes Buffet on the subject: https://www.sovereignman.com/investing/warren-buffett-its-a-...