How to Get the Investment Information with the Best Edge

Posted: Apr 19, 2014 12:01 AM
How to Get the Investment Information with the Best Edge

One of the key points that I make whenever I talk with investors is the importance of information. That information can take many forms. There are the obvious ones — press releases, earnings reports and related company conference calls, financial filings with the Securities Exchange Commission, third-party research reports and all sorts of articles in newspapers, magazines or online. That’s the easily available kind of information. As you might imagine, if it’s easy to get, then most people probably have it.

Viewed from the institutional perspective, i.e., mutual fund and hedge fund managers, information available to everyone provides little edge to anyone. I’m not suggesting they utilize or condone the use of inside information — far from it. Instead, I’m talking about going one or two steps further than what everyone else is doing. That extra effort can take the form of buying industry reports or subscribing to other services, such as my investment newsletter PowerTrend Profits, which uses institutional tools and methods, along with my PowerTrend lens, to invest.

There is another resource that most investors have available to them, but it’s surprising to me how few actually take the time to use it. Most, if not all, publicly traded companies have an investor relations department, which is staffed with knowledgeable folks who can help you to understand the company, its products, the industry and how it competes in that industry.

For the more than 20 years that I have been in and around stocks, these folks have been a great resource. But as you would expect, some have been better than others. An investor relations person is not going to share non-public information or divulge anything sensitive, but a good one can help you understand the business and the company’s strategy. That’s more than helpful, and I don’t understand why more investors do not utilize these folks.

I take that back. I know why most folks don’t do it.

First off, few know these people exist and are paid to answer your questions about the company. Second, people may feel they do not have the time, as in the amount of time it takes to get ready to have a productive conversation with an investor relations person or any of the company’s management team members. It takes far more time to prepare and fine tune your questions compared to the actual conversation time with them. As for me, I’ve been having these types of conversations for more than two decades, thanks to my earlier career in Wall Street equity research firms.

Generally speaking, pain points make for good investing opportunities, or at least for solutions. That’s why I started sharing my one-on-one conversations with the movers and shakers in the business world. You’ve probably heard these conversations referred to as PowerTalks. Given the players at public and private companies that I’ve spoken with during the last year-plus, I’d say it’s a fair name. Since I started sharing these conversations, I’ve spoken with, and you could have listened to, chief executive officers and other key executives from Smith & Wesson (SWHC), General Motors (GM), Qualcomm (QCOM), IBM (IBM), Panera Bread Company (PNRA), Sourcefire, which was acquired by Cisco Systems (CSCO), United Real Estate, Skyworks Solutions (SWKS), InterDigital (IDCC), Opera Solutions, Principal Solar and many other public and private companies. I’ve also shared my conversations with a number of thought leaders, including Steve Forbes, Donald Rumsfeld, Lou Dobbs, Niall Ferguson, Dr. John Lott, Peter Schiff, Debra Coy, John Allison (CEO of the Cato Institute) and more.

It is conversations like these that allow me to piece together what is going on in the world and how to best position subscribers to my investment newsletter,PowerTrend Profits. I don’t see how you can do it any other way, unless you want to be trapped with the rest of the herd.

In case you missed it, I encourage you to read my PowerTrend Brief from last week on Eagle Daily Investor about how the new “TV” will affect cable companies and consumers.