Thursday, July 12, 2012

Company videos

Hi,


Just a quick note to apologise for radio silence this week, I came down with a nasty chest infection on Friday & have been confined to bed for 5 days with a fever & general feeling awfulness. Unfortunately I was staying with friends, so turned into their worst house guest ever, lying in state demanding soup all the time!


On the mend now thankfully, so my morning reports will resume tomorrow.


One interesting project that I couldn't miss happened today. Some time ago my old friend David Stredder, who has probably done more to help private investors than anyone else I know, asked me to get involved with an idea he had to make some videos of meetings with company management. The idea came from the success of his "Mello" investor evenings, where up to 80 investors come along to meet management of a number of small caps, and then eat/drink/network afterwards. They're excellent events, but for every person who can make it to such a meeting, there must be dozens more who are not able to attend.


So Dave came up with the idea of him & I going to meet management of companies we think are good investment ideas, taking a small film crew with us, videoing the meeting, and putting it on the internet for anyone to watch. Thus disseminating useful info about good quality small caps to all investors or potential investors.


We decided to give it a go, and did the first one today. I have no media experience, so was pretty nervous, but as soon as I start talking about shares, all nerves disappear, and thankfully that happened today. The video should be ready in about 10 days we hope, so I'll put up a link here to it (and other interesting videos we see out there that others do - there are several people active in this space).


Where I think Dave & I have a unique edge is that our videos are real, experienced investors, having an informal meeting with a company Director(s), and just chatting about the company - so it's a fly on the wall situation of an actual investor meeting, rather than PR fluff. We're not soft-soaping them, but neither are we doing a Jeremy Paxman either - it's just how we would be in reality - i.e. courteous, but asking the questions which seem pertinent to us. Dave also asked in advance on the company bulletin board what questions other investors wanted to ask.


It went really well. As our first attempt, I'm sure people will criticise elements of it, and we will welcome all feedback, and ideas for improvements once it's published.


As regards fees, Dave didn't want any payment at all, but I wanted a very small fee just for my time & travel costs (as it was not a company I already held shares in), plus of course we had to hire the film crew, so we charged the company concerned a very small fee, but it was on the understanding that we ask the questions we want, and we edit the video how we want. So as independent as you can get hopefully - both Dave and I value our reputations far too highly to put anything out there which compromises us.


We hope investors enjoy the videos, as we've got a couple more planned, but the vital element is that WE choose the companies! So we're turning away anything that isn't something we would personally invest in. That's the key point of difference, compared with the PR spin for rubbish companies that you may find elsewhere.


I became cynical about meeting management of companies, as after all it's their job to be likeable and believable, so in the past I've maybe been too gullible in believing stories that were weak. But these days I'm a bit more cynical, and think providing you avoid the temptation to get pally with Directors, then it should be possible to remain objective.


With the latest micro cap trying to De-List, and therefore destroy shareholder value, Lighthouse, it's a real minefield looking at micro caps. Hence one of the questions I asked the Chairman of the company we met today (Plastics Capital) is whether he was committed to retaining the Listing. We got an emphatic confirmation on that point, so that point alone was a useful outcome. We also cleared up a point over another Director's departure which had caused consternation amongst private investors (when it needn't have done). So a very useful day.


I'm still feeling pretty groggy, but will get up at 7am tomorrow to resume my morning reports.

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