Keeping your guard up
The stock market, and more broadly the capital markets as a whole, is part of an industry designed around the transfer of capital from those who have it to those who want it (or who want more of it). Investor conferences and the companies that attend them are all inclined to show the best parts of their story in the hope that investors will direct capital their way. As a self-directed investor, you will be facing industry professionals who are trained and seasoned at giving you the highly polished version of every story and so according to Ben and Benj, keeping your guard up is a must.
If you are a value investor then getting to know the company is simply a part of the process of making your investment decisions. Going to an annual general meeting, for example, is a useful way of getting to meet and know management and company executives. Building these relationships, while important, are not without their risks. In particular, while having management a phone call away or meeting them in person might “feel good”, according to Ben, it doesn’t mean that your investment and your money is any safer. Be cautious not to confuse the ‘good feelings’ with good company prospects. Another great tip offered by Benj Gallander is that being cynical and challenging what companies or analysts tell you will help to ensure that you don’t get the proverbial wool pulled over your eyes. As Benj put it, “people may be telling you the truth as they believe it [but] that still doesn’t mean that it’s right”.
You are the market
As scores of investors poured through the doors at the Vancouver Resource Investment Conference it was clear that the appetite for learning about investment in the precious metals area was still pretty healthy. With so many voices in support of the sector, however, contrarian investors certainly find cause for concern. Of course, it might be fair to say that contrarian investors are always typically concerned about something – they are a tough crowd to please by definition.
Balancing being skeptical with actually taking a chance on an investment is part of the art of investing. Realizing that you are a part of the market means there are many lessons investors continuously have to learn about everyone else, but also about themselves in order to truly succeed.