By Charles Roques
New companies every week, more press releases every day! How do you keep up with all the information and what’s relevant in it? How does a novice investor assimilate all of this? If you don’t have a Wharton, Sloan or Harvard MBA, then it may not come natural to you to decipher complex business and stock market data or parse candlestick charts. Unfortunately, you also can’t obtain all of the information you need at the current penny stock level. In the meantime, for the less sophisticated yet serious and inquisitive investor, exercising common sense, tracking a company’s history through its press releases, and checking the simple vital statistics of a company can still reveal something about its credibility and even shed a little light on its investment potential.
Unlike larger, listed companies, some information can be hidden from public scrutiny at this trading level, so sometimes the only sources for aggregating data or history are the press releases. But always remember that a company or a PR firm issues press releases so they are not objective nor are they meant to be. However, with a little scrutiny, you can glean pertinent information. Start following the cannabis companies that interest you, create ﬁles for them and then pick a few to explore and potentially invest in. This lull in growth won’t last forever, but it does offer valuable research time without fear of missing out on huge returns.
For starters, don’t obsess about how germane the information is, especially if you are just beginning and don’t quite understand what your research means; instead, keep track of research as if it were a diary. History is by nature an accumulation of facts, so one of the best ways to understand a company’s progress is to simply follow it. As soon as you start compiling info about the companies, the learning process and company histories should start to build a foundation of understanding for you.
Numbers will say more with much less, but what if you can’t ﬁnd them or are confused about what they mean? Compiling history will gradually ﬁll in a picture of the company, at least certain aspects, until you have a more complete picture. A simple way to do that is to start a ﬁle for each company as you discover it. These living documents should include with the company name, address, corporate executives, actual product or service, then you can add press releases or other research to it over time.
You are gathering information, no single piece of which will alone justify investment; however, in combination with other items, you will start to see the bigger picture. You may even forget some of the data, but the research process itself often reveals unexpected information. For example, valuable things you will see by keeping a history of a company, good or bad, are patterns and deviations, consistency or inconsistency.
Read the latest press release, add it to your file, then forget it until you have to add an update to your file. Don’t belabor the research until it’s numbing. You are following a trail, not solving a complex math theorem. When solving a crossword puzzle in ink, if you tend to come up with the same answer each time you read the same clue, you don’t have to write it down if you’re not certain its correct. Likewise, each time you update your files on companies, you will refresh your memory of the trajectory of the company. Read the good news and the bad news. It is important to know not only what to do but what not to do.
Knowing a company’s history gives perspective to its press releases, as you become used to them, without giving them undue importance. Being able to quickly recap the history, as one adds the latest news, keeps new information in context. In a way, everything is about context. A commonsense check-list might include: Why does one company always post such long press releases while another company doesn’t? Try to distinguish “ﬂuff’ from substance. Is the company issuing too many repetitive press releases? Is information just being recycled or is it genuinely new?
Some of the information is very accessible, some is more obscure and some may require interpretation. You have to start somewhere so start with the information that is accessible and understandable to you. Where is a company located? What does it actually do? As you learn more, dig deeper. Investing is not all by the gut, but you should still investigate your feelings about a company. If a piece of information doesn’t seem right, probe a little.
At this stage don’t try to devise a system or strategy for making money from stocks, leave that for the sophisticates. Instead, try to devise a system for quickly ﬁling information you compile about the company’s history. Information that you ﬁle and organize yourself tends to remain with you.
Press releases, news and analysis will constantly come out. Compiling a history can be a daunting task for the individual investor who often resorts to just following their favorite pundit, but it doesn’t have to be.