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I often grumble about the gap between private investors and the professionals.
As a private investor, one is often treated as a second-class citizen with less access to information. Sure, in some ways I understand why; a handful of professional investors may hold a hefty chunk of the listed company’s stock while a private investor may hold fractions of a percentage at best.
So for management, a small group of professionals goes a lot further than even a large group of private investors.
But there are many ways we as private investors can hack the system and get a lot more information.
As I am part of the media, I often get invitations to results presentations that the average investor simply does not get invited to. Yes, we all get the results on Sens, but results presentations are often well worth attending as often a lot more detail is presented. In addition, the attendees can ask questions, and the answers to these can also be very enlightening.
So how does a private investor go about attending these results presentations?
Simple: we ask. Contact the company’s investor relations department and ask if you could be added to the invite list for results presentations. Before I worked in media, I often did this, and the vast majority of companies were more than happy to extend an invitation. Hence I got the invites as an ordinary Joe and attended a number of presentations.
And here we need to pause. Some of these presentations were so boring I wished I’d never heard of the company nor requested an invite. But you quickly learn which to avoid and which are worth the time and effort.
Another route is the Investments Analysts Society of South Africa. Members get invited to all results presentations, but in order to become a member, you seemingly need to be working in the investment industry. So that doesn’t help.
If you can’t attend the presentation, the next step is the company website’s investor relations section. You’ll not only find results presentations but even copies of other presentations they have done, for example from the Mining Indaba and the like. Attending in person is always best, but if we have to hack it then we will.
These days you’ll also find many companies will webcast their presentations live so we can actually watch and listen from the comfort of our homes. Failing which, companies always publish the presentations on their websites and some will even include an audio file of the presentation.
Another is conference calls, which are becoming more popular, especially with announcements outside of results (like Consolidated Infrastructure did earlier this month).
I also found that making contact is often a winning strategy, especially when it comes to smaller companies. I still clearly remember phoning a listed company (a small cap, admittedly) and asking to speak to the CEO, and boom – in no time there he was on the line. I did not mention that I was a tiny private investor but asked my questions and got answers galore.
So try sending an email or simply call if you have questions. You’ll likely hit a wall of silence at times, but other times you will hit the jackpot.
We can, of course, attend the annual general meeting (AGM) – every investor has full access to the AGM. And as I have written recently, I am going to start doing that.
A last point is that some companies just make getting information almost impossible. If that is the case, it makes the decision easy – then I just avoid that stock. If a listed company is not making information freely available to an investor, then we get the message loud and clear. They have no interest in small investors and I’ll take my cash elsewhere.
This article originally appeared in the 25 August edition of finweek. Buy and download the magazine here.
