Investorsfriend.com Newsletter, May 24, 2002
Updated Research
Sino-Forest is updated as a Strong Buy. It's
been a long wait for this stock to recover and it may take another year to start
to really move but fundamentally I believe that I will win in the end if I
invest in such an under-valued stock.
Canadian Medical is updated and continues as as a Strong Buy. In addition
Telus is updated and upgraded to a Speculative Buy, and there is also a new
listing, a profitable small Canadian semiconductor company that I rate a
speculative buy. These three reports are available as a package of
research for sale for $9.00 U.S.
Update on BayStreet.ca
As noted last issue, I am now providing research to
www.BayStreet.ca. They are selling a paid
membership service that offers "streaming quotes". I'm not sure how many of you
would be interested in streaming quotes. I understand that they may come out
with a cheaper package that offers research and exclusive commentary for a lower
fee. For now, you can access four research reports that I posted with them,
simply by signing up for the free no obligation, no credit card required, two
week trial. My most recent report posted with them is a Strong Buy on a
profitable small Canadian telecommunications manufacturer. Obtain access by
signing up at
http://www.baystreet.ca/signup.cfm
.
My only involvement with BayStreet.ca is to provide research in
return for a small share of the membership fee.
The Markets:
It's hard to get excited when stock prices are flat or falling. But there are
always bargains out there. If we can find them and then have the courage to
invest when others are afraid then we will likely be rewarded in the end. It's
nice when a stock we own rises, but if a good stock falls then that is an
opportunity to invest at a lower price as long as we are confident that the
stock is good. I believe that the type of detailed fundamental analysis that I
offer will provide an edge in the market over the long run. I am quite happy
with the performance of my picks to date.
Membership:
My thanks to those of you that have referred this Site and newsletter to
others. Membership continues to slowly grow. More members motivates me to keep
on sharing my research. I have no budget for advertising and so it really helps
me when people refer others to the Site.
Value Investing
I made some minor edits to my article on how to pick stocks. You can never
review the basics too many times.
http://www.investorsfriend.com/how_to_pick_stocks.htm
How to Succeed in Business and Life:
(How is that for an ambitious title for this next section?)
I recently read a most excellent book called the E-Myth Revisited by Michael
E. Gerber.
I had heard this author interviewed on the radio and his simple messages
really struck home for me.
The E-Myth refers to the myth that most small business owners are
entrepreneurs.
In fact most small business owners open a business because they are really
good at some trade or other but most have no clue how to run a business.
In a weak moment they "suffer an entreprenurial seizure, they open a
business, and soon end up working for a lunatic".
Typically, they try to do all the work themselves and become overwhelmed.
Next they hire some help such as an accountant but don't end up supervising them
properly and end up out of control and out of money. The next step is to shrink
the business and go back to a one person operation. They have no time to develop
the business as an entrepreneur because all the time is spend doing production
work.
Many of these people end up working horrendous hours for very little return.
Many business close up, but even sadder is the ones that soldier on forever
spinning their wheels and getting no where.
The authors solution:
Look at small businesses that work. Many franchises work almost every time no
matter who runs it. The reason: the master franchise owner has has laid out an
incredibly detailed operations and procedures manual that virtually guarantees
results. They have a successful formula and they simply repeat it. The reason
people go to McDonald's is not the great food. It's the incredible consistency,
we can go to any McDonald's in any City and the experience will be pretty much
the same, we know what the parking lot is like, we know the price, we know how
long it will take, we know where the washroom is without asking etc. We are
incredibly comfortable with the whole experience. Just about anyone can could
run a McDonald's - all you have to do is follow the exact procedures that they
will teach.
So, to succeed in life we need to be more like franchises.
If we own a business write down a detailed procedures manual.
Figure out the best way to do each procedure in your business or job and
document it.
Measure everything and note what works.
If wearing blue suits helps make more sales, then everyone wears blue suits.
Sounds like it impedes creativity for employees and it does. It also works.
Don't hire people with big ideas of how to run your business. Hire people
willing to follow your procedures (after you have perfected them). Maybe the
better people can eventually help in setting procedures but at first you just
need people to follow your methods.
Always deliver consistent results to your customers. Keep every promise.
To learn more, buy the book.
I consider this to be one of the best business books I have ever read. I
think it is a must read for anyone struggling with a small business. And I think
it has a lot to offer to employees and managers in corporations as well. Working
on best practices and documenting procedures could help just about anyone.
Shawn Allen, Editor