In the latest episode of ZaksTradersCafe, Zak Mir sits down with Christopher Nicholson, Managing Director and Head of Research at ACF Equity Research, to dissect some of the most intriguing themes currently shaping the financial markets.
In the latest conversation on Share Talk, Zak and Christopher walk through the topics that are shaping markets right now — from the supposedly irresistible allure of Bitcoin treasury strategies to the very-real (and very-messy) AI debate, and a handful of small‑cap ideas worth watching.
Opening thoughts: big pots of sovereign cash and a tongue‑in‑cheek valuation of the UK
We began with a bit of light banter — Norway’s sovereign wealth fund was the jumping-off point. The fund’s scale prompted some cheeky musings about whether, in a world gone mad, a friendly buyer could simply clear the UK’s national debt.
That brief riff served as a reminder: macro stories are important for investor psychology, and headlines — whether about sovereign cash piles or geopolitical land grabs — they can drive sentiment and market flows just as much as fundamentals.
Bitcoin treasury strategies: promise, peril, and why many are underperforming
One of the main chunks of our discussion focused on companies that have adopted a Bitcoin treasury strategy — that is, corporates (often small caps) that hold material Bitcoin on their balance sheet. There are a few reasons these stocks have disappointed investors.
Small‑cap stock ideas worth a look
We finished by running through several small‑cap ideas where asymmetric returns are possible — but so are total losses. Below is a concise take on each company and why it made the list.
Wishbone — follow the Brescia
Why it caught attention: Breccias can host high concentrations of copper, gold, silver, uranium and even rare earth elements — and, geologically, they can indicate the presence of larger, economically interesting systems nearby.
- Performance snapshot: a dramatic week of gains and from a very low starting market cap — the stock has run strongly this year.
- Why cautious: it’s early — assay results from cores are awaited. Small caps can double and then fall 90% — balanced portfolios remains essential.
- Comparisons: people have mentioned Greatland Gold as a benchmark, but that requires caution; whilst it is always possible WSBN is still some evidence steps way from an exploration story that will scale to Greatland’s valuation
MAST (modular energy assets) — execution matters
MAST has moved from promise to delivery — and that’s the most important thing in small caps. The company installs modular engine‑based capacity on the UK electricity network that delivers peak power and network stability. Key points:
Strategic position: peaker/backup generation is critical to grid stability; batteries alone don’t solve the problem for long durations or all stability scenarios.
- New market opportunity: colocation for AI compute (high power demand) increases addressable revenue.
- Targets: a medium‑term goal of 300MW, with 150MW on the board and now progressing to production,actual delivery ia now faster than many perhaps expected.
- Valuation: still modest on a small‑cap basis £21m market cap, up 2200% YTD and doubled last week), plenty or upside is plausible if execution continues; liquidity remains a constraint.
IXR and Rainbow Rare Earths — REE exposure
Rare earth elements are strategically important (batteries, permanent magnets, defence). Two themes we like:
- IXR.AX Australian): rare earths exploration in Africa plus a rare earths recycling angle in Belfast in the UK. Recovery from a weak period in 2024; attractive market cap for a company with assets and recycling ambitions.
- RBW.L Rainbow Rare Earths: low‑cost strategy with some US relationship building. Worth watching for near‑term production and strategic relevance.
BCLI :OTCQB (Brainstorm Cell Therapeutics) — high risk, high potential
What it does: an Israel‑based, US listed,biotech working on stem‑cell therapies for motor neuron disease/ALS/Lou Gehrig’s (and other neurodegenerative indications). Major points:
- Potential: patient testimonies and P3 and beyond data are intriguing; stem cells could be transformative for degenerative diseases.
- Risks: classic biotech binary outcomes — P3b clinical trial risk, funding shortages, regulatory hurdles. Company has migrated from Nasdaq to OTCQB and needs further capital.
- Context: politically sensitive backdrop (regional issues) may complicate sentiment, but the science is what matters long term.
Perpetua Resources — antimony & gold
Perpetua is a gold story with a strategically important antimony asset — one of the few near‑term antimony resources in the US. Antimony has military and battery applications, which adds a potential regulatory/strategic premium to the story.
- Valuation note: the market has often valued the company as a gold play; the antimony angle is a strategic upside that could influence permitting and political support.
- Performance: the stock has delivered strong returns since mid‑2022; the case now is about execution to production.
Key takeaways for investors
- Small caps can offer asymmetric returns, but you must size positions sensibly and expect high volatility.
- When companies pivot into Bitcoin treasuries, scrutinise dilution history and funding strategy. Down‑round equity raises are a silent killer, though sometimes they are still the only option.
- AI is transformative, but today many claims are ahead of delivery. Focus on operational deployments that generate measurable ROI.
- Look for competence: the business you own should match the people running it. Hiring crypto “OGs” for PR is not the same as demonstrated corporate execution.
- Seek independent analysis rather than relying solely on headlines; research and scepticism pay off in small‑cap markets.
Conclusion
The small‑cap space looks poised for interesting opportunities: special situations, thematic plays (Bitcoin, AI, REEs), and companies that can execute. But there are strong headwinds — market sentiment, dilution, and the natural churn of creative destruction in new tech.
If you’re considering exposure, do so with a balanced portfolio approach, insist on clear evidence of competence and capital strategy, and be cautious with stories that require perfect market conditions to succeed. Independent/independently minded, expert analysis remains invaluable in separating genuine opportunities from fashionable setups.
Actively seek out independent/independently minded, expert analysis rather than relying solely on mainstream media narratives.
