A path to successful investing

I closed the month with a +37.84% total Return on Invested Capital from my six CEM-introduced stocks. That was in less than 30 days invested.


I look forward to meeting another 18 CEOs in Nov and 18 in January at these CEM Conferences. As a former investment banker who had to review many applications every week, I can speak to the immense time that it takes to filter out the good ones worthy of further time and money to investigate. CEM has done a great job of that for their investor network. I consider myself fortunate to be included.

These are companies seeking capital by way of private placement offerings and while some are still not yet trading, the others are keen to increase market awareness of their ‘new’ stories.

Conferences are often made for companies that are in a distribution phase. Sometimes, the investors should look at that in a negative way because that is when the insiders are selling their stock into the enthusiasm they are creating. So, investors must be careful enough to recognize when (i) there is securities issuance to build up a treasury that is needed to create future value for shareholders, or (ii) the promoter’s story is already well known and the greater market awareness is mostly helping the insiders sell their stock.

As the head prosecutor of a major securities commission once said to me in private when discussing some promoters I knew at the time: “This kind of person never approaches you with the word Liar stamped on their forehead”. In most cases, the word “liar” is far too strong; however, promoters are known to stretch the facts so that on balance their story is misleading. That is a fact.

Having personally met well over 1,000 promoters, and probably over 2,000 in the past 40 years, I could tell you some mind-boggling stories myself. So, it pays to be extra careful when investigating unseasoned securities, and I am thankful for the job that the CEM Capital team does in that regard because I want to participate in entrepreneurial markets but don’t have the time to start from scratch with every story that comes to me.

A final point here is that ‘new’ companies are rapidly becoming big companies, and many ‘old’ companies are on care and maintenance while dividends and buy-backs are filling the pockets of the major shareholders and management bonuses are paying the salaries of the operators. The biggest difference between new and old is the people. It’s a fact that younger people have newer ideas and many become very successful in the practice of risk-taking entrepreneurship. Sometimes, it happens that ‘old’ people use their experience and well-developed skills to find exciting new opportunities. I have recently cited Henk Van Alphen (World Copper WCU.V founder/chair) and Asante Gold’s Douglas MacQuarrie as two of those. Young or old, these are the people that investors have to identify, and doing so as early in a newco’s life is the best way to invest successfully.

Truly, it’s a lot easier to trade in seasoned securities; the problem is that market integrity is nowhere close to what it was 40 years ago. What was happening then with penny stocks is now commonplace with large-cap and mega-cap companies. The expression “If you are not in the room, you are not in the deal” is more true now than ever. So, what I am saying is that while some rooms are small and undeveloped, it pays to get as close as possible.

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