The DTM5 Strategy makes investments in early stage ventures in sectors such as Technology, Decentralized Finance, and Metals. I follow a process when making investment, that looks like this:

1. I attempt to determine the Merit of a company by running a series of fundemental screens, as well as a subjective evaluation of management competence and market communications
2. I try to determine if the company’s business strategy has Leverage – the potential to create exponential growth for shareholders.

If the company proves to have both Merit and Leverage, I attempt to make an investment using the following parameters:

1. I attempt to acquire the shares of the company at the right Price (Valuation) that will allow for significant upside and limit downside risk
2. I attempt to acquire the shares of the company at the right Time in the company’s commercialization journey.

My investment equation looks like this: Merit + Leverage + Right Price + Right Time = Make that Investment!

Which brings me to Real Luck Group (TSX: LUCK).

Back on November 13th I commented: I’ve added LUCK to the DTM5 team, with a small position @ 0.26. I want to have a deeper look at how they execute over the next few months without risking very much. Why now? Well, the technical bottom looks in, resting nicely in the 0.25 / .030 range; They have 5 quarters of liquidity (cash) on hand; They are at an inflection point on marketing and revenue (both should be ramping up); And They are a bunch of sharp operators in a consolidating, hyper competitive industry; Plus there is general negativity among current shareholders

Then, on December 10th I noted: I’ve been watching the stock bounce along the 0.20 / 0.25 cent range for a month. I’ve continued building a small position over the past few weeks in that range. There are some upcoming catalysts, such as the pending launch of an online casino property, as well as the kick off of the marketing / customer acquisition portion of their active Esports platform. If done right, revenue will commence and grow over the next couple quarters, validating their business model.

Well here we are in the middle of February. I’ve continued to build my position over the past two months with an average cost in the low 0.20s.

LUCK is not a company with a lot of news flow (yet) – But, there have been some developments. Their online casino property is launched; They’ve completed internal improvements to their tech stack; Marketing and customer acquisition programs are starting; They have added several key team members; And they are seeking licencing in various major regulated markets as part of their growth strategy.

So why has LUCK graduated from a small position to become a starter in the DTM5? It checks all the boxes – It has Merit (Good balance sheet, competent and experienced management, the right capital / share structure), it has leverage (a start up in an accelerating sector with great potential margins and massive TAM), the Price is right (trading at its cash value per share, with conservative management and a controlled burn rate) and the Time looks opportune (pre revenue, and now well past IPO, with weak hands or early seed investors being mostly shaken out).

Now this is is a VENTURE investment. ‘Venture’ means a risky or daring journey or undertaking. Buying shares in an online gaming company with no revenue that is barely a year old is not for the faint of heart. But I do think, for the various reasons I’ve mentioned, that the risk level is significantly lower than it was 6 or 12 months ago. Its a far better buy now than it was when it went public.

I’m following the company closely; As their strategy unfolds this year I expect to see some results in the way of brand visibility, partnerships and revenue driven by effective customer acquisition strategies. I’ve taken my seat at the table as a LUCK shareholder, and I’m looking forward to having my investment thesis validated with a big payout as we move forward. That, or I’ll fold my hand and save some chips for another day.

GLTA!