Mark Cooper on global small cap value, AI and managing small cap long/short at MAC Alpha | S08 E13

In this episode of The Acquirers Podcast, host Tobias Carlisle and co-host Jake Taylor welcome Mark Cooper, founder and portfolio manager at MAC Alpha Capital Management, to discuss his global small cap value investing strategy. Cooper emphasizes the compelling opportunity in international small cap value stocks, which he argues are historically cheap and poised for significant mean reversion. He contrasts this with the overvalued, high-growth U.S. small caps—particularly those in the MAG7 tech cluster—whose valuations he views as unsustainable, drawing parallels to the dot-com bubble. Cooper’s long-short strategy focuses on owning high-quality, competitive advantage-driven businesses globally while shorting overvalued, unprofitable companies with no sustainable edge. He highlights the importance of long-term research, facility visits, and avoiding overreliance on AI for decision-making. The conversation also explores the risks of AI-driven speculation, supply chain constraints for critical commodities, and the distortion of market metrics like P/E ratios. Cooper concludes that the current environment offers exceptional asymmetric upside for disciplined value investors. Key takeaways include: 1) International small cap value stocks are historically cheap and could outperform the S&P 500 by 25% annually over 10 years if valuations revert; 2) The U.S. market’s concentration in a few high-growth tech stocks increases systemic risk; 3) Investors should prioritize business economics over simplistic metrics like P/E ratios; 4) Active, long-term research and on-the-ground due diligence provide a competitive edge; 5) The current market environment favors value investors who can withstand short-term underperformance; 6) The rise of passive investing and momentum trading has distorted market dynamics; 7) Commodity constraints and construction delays could limit AI infrastructure growth; 8) Long-term ownership of high-quality businesses with durable competitive advantages is more efficient than constant turnover.