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Hey everyone, so Stig and I are so pumped to share today's episode with you because it was quite the learning experience for both of us.

Our good friend and former billion dollar hedge fund manager Jesse Felder told us about today's guest and he insisted that it was an important person for us to interview.

So Jesse told us that we would be hard pressed to find a guest that knew more about small cap investing and boy was he right.

So after hearing this interview, you'll quickly learn why Eric Siniman, who's today's guest, came with such a strong recommendation.

When we originally invited Eric to come on the show, it was to talk about small cap investing where he's really the top authority.

I learned a lot from our discussion about how price were set in the small cap market compared to lots cap stocks.

What really surprised me was whenever we transitioned into our discussion about profit margin cycles.

What most investors do is that they look at the past 10 years and then they make some assumptions about the free cash flows and the earnings of that stock.

However, what you might be looking at is two positive credit market cycles and one negative all the opposite.

Together with Eric, we want to solve that in this episode.

You are listening to the investors podcast where we study the financial markets and read the books that influence self-made billionaires the most.

We keep you informed and prepared for the unexpected.

So Eric, thank you so much for coming on our show. Such an honor to have you here. I know our audience is really going to eat up this discussion about small cap investing.

Thanks a lot, Preston. Thanks for having me and of course, thank you Jesse for recommending me. I appreciate that.

So whenever I look at your background, I see that you've actively managed money for 18 years and recently in 2016, you returned the money from your fund back to your investors.

And in your bio, you talk about this idea of relative returns versus absolute returns. Talk to our audience about first of all why you return the money.

And second of all, this idea of relative versus absolute returns.

Yeah, that's a great question. First of all, I return the money, you know, absolute return investing if you're not getting paid to take risk.

You know, I just I don't do that, but actually return investing for me. I actually have a specific hurdle rate and that's 10 to 15% on my equities.

And if I can't achieve that, that's my objective. I'm unable to achieve that. I hold cash. Well, what happened to me in 2016 is I had a high level of cash at that time.

I had about 80% cash. And I was also in a very contrary position, the precious mill of miners. And I mean, imagine that holding 10 to 50% miners at 80% cash in somehow still maintaining the vast estimate delivery.

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