Newsletter May 24, 2002
InvestorsFriend.com Newsletter May 24, 2002
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.
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.
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.
I made some minor edits to my article on how to pick stocks. You can never review the basics too many times.
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 entrepreneurial 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.