Linda (@lindaodnokon) and I often have arguments about how often I give away my investment ideas for free. Love of my life and business partner, I often frustrate her or lose my temper, but I fail to explain myself fully.
Ideas mean nothing without the ability to execute, and we have that capability in spades. Nor does anybody benefit from taking advantage of an idea on their own; they have no idea when that thesis comes to an end nor will they subsequently benefit from the next idea, and the one after, and the one after that.
There is a whole industry out there dedicated to selling investment ideas. It doesn’t matter what the quality is, and for the average investor something like the Motley Fool is superlative whereas some of the shills, otherwise known as newsletters, are nothing more than sensationalized pieces of poop, preying on baser emotions of fear, greed and envy. Without subscribing for or paying for enriched content, you don’t get access to the ideas.
What is more important is that the ideas that appear in the press, whether publications like the Globe and Mail, or on business news networks like CNBC, or even newsletters good or bad, quickly result in a crowded trade. I would love to be in a place where my opinion could move a market, but that’s not going to happen. On the other hand, I won’t crowd the trade – I make money not on selling the ideas, but in executing timely ideas in an efficient and compliant way.
I have built a considerable business on at least five occasions relying on selling the “big idea”. I’ve used seminars, cold calling, referrals and prospecting of friends and acquaintances. I’ve built extensive explanatory communications to make sure that I could explain both the complexity in simplest terms and in an ego gratifying way show that I can take all those disparate parts and package them up into something elegant. And inadvertently I’ve built into those projects their own obsolescence – markets, tax regimes and economic conditions change, but a well-built structure is worthless because you can’t renovate the bones that it has been built on.
Information has become so much more freely available. But as communication has disrupted tightly constrained paradigms, I have more freedom than ever to communicate timely ideas that cumulatively represent a whole that is unique. I can let the body of my work, the constant flow of ideas, cumulatively to represent a dynamic “big idea”. And I don’t have to spend endless amounts of effort explaining myself, because either an investor will have to rely on my expertise or do the heavy lifting for themselves.
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This information has been prepared by David Chellew, Portfolio Manager for Industrial Alliance Securities Inc. (IAS) and does not necessarily reflect the opinion of IAS. The opinions expressed are based on an analysis and interpretation dating from the type of publication and are subject to change. Furthermore, they do not constitute an offer or solicitation to buy or sell any the securities mentioned. For more information about IAS, please consult the official website at www.iasecurities.ca. David Chellew can open accounts only in the provinces where he is registered.