Five reasons investors should treat stocks as if they were buying a house leaderpost.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from leaderpost.com Daily Mail and Mail on Sunday newspapers.
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By David Thomas, FP Editor-in-Chief
Ever find you’re exposed to both too much news and too little news even at the same time? Lucky for you, our brightest writers and editors at the Financial Post are going to solve both of those problems. Also at the same time.
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Too much news? Yes, it can be hard to keep up with the hourly and daily flow of news. Maybe you’ve had time to skim but not to get at how things happened, or why.
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On a professional basis, I have now been analyzing small and mid-capitalization companies for more than 30 years. Smaller companies, in my view, are just more fun. Sure, they are riskier than larger, more-established companies. But they are also typically growing faster, and can provide greater investment returns. You just have to be careful, and know what to watch out for. There are dozens of warning signs one can pick up on for small companies, and we will cover these in a later column. But for now, let’s focus on some things to look for, when trying to find a good small or mid-cap investment idea. We will try to list some company examples, as well.
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This week, I was a guest presenter for an MBA Entrepreneur Class at York University. When originally asked to present, I really didn’t know why. After all, I am just a stock guy. But then I realized that, from a corporate perspective at least, I have been through a lot in terms of types of companies I have worked at, transactions, transitions and challenges. So, suddenly I had a few more ideas to present to the class other than some of my favourite stock picks. For budding entrepreneurs, all will likely go through at least a few of these work/corporate transitions in their careers. Here are my thoughts on five corporate scenarios: