It seems that the second blog article covering my Snowball Effect interview was released in early September.
I highly recommend reading this, as it nicely summarizes something I’ve written about before on how to make an investment strategy.
It seems that the second blog article covering my Snowball Effect interview was released in early September.
I highly recommend reading this, as it nicely summarizes something I’ve written about before on how to make an investment strategy.
I’m vehemently against cryptocurrency as an investment for a number of reasons that I won’t go into in depth in this article (think: no intrinsic value, no laws governing the currency, no reason for particular cryptocurrencies, to many scams around, etc.). For me it’s not really investing because investing is about calculating return based on real factors; cryptocurrency investing is more like gambling in my opinion.
Nonetheless, I decided to partake in the fun and buy some Ethereum (ETH) and Bitcoin (BTC). I figured $1,000 on each wouldn’t do any harm and wouldn’t be the end of the world if I got scammed or lost my money in some other way (lost wallet, hardware failure, virus, currency related issues, etc.).
After reading an article on MoneyHub, I signed up for EasyCrypto. EasyCrypto is not a crypto exchange (matching buyers and sellers), but instead it’s a retail shop (selling you currency and buying it off you, making profit on the difference). Upon preparing to make my purchase, I noticed that the fees are very different for small purchases (~$100) vs “large” purchases of a whole crypto token ($6,239). Here are the prices I was offered:
NZD$6,239 = 1 ETHEasyCrypto’s price to buy ETH vs NZD at the time of writing
NZD$105 = 0.01190783 ETH
If we divide NZD$105 by 0.01190783 to get the price for the whole coin, that gives NZD$8,818. That’s a 41% increase in price for buying a smaller unit of ETH, which is a phenomenal difference if we consider that the brokerage fee.
I didn’t bother looking at the difference in sell price (which could be less favourable as they may consider having you by the #@!!$ because if you’re buying from them, you might not have the technical nous to sell elsewhere), but if we assume that it’s similar, you’re looking at an 82% increase in your ETH investment to break even when buying and selling with EasyCrypto. This number is worse if you compare it to the ETH price listed on Google, rather than the rate they sell for when buying a whole unit of ETH. This shocked me enough to not even bother investigating the fees for the small volumes I was looking to buy.
In EasyCrypto’s defence, I guess it could be argued to be a fair rate; after all, a retail shop of any other nature might have similar markups and they are dealing in a commodity whose price can fluctuate wildly – coupled with the fact that purchases may be automated through the website and therefore subject to additional fluctuation risk.
However, given the fees of EasyCrypto I think this precludes me from making any investment through this website. Perhaps a crypto exchange is the way to go if I were to pursue an investment in cryptocurrency?
I’m feeling bearish about the economic impact of the RBNZ’s position on increasing the OCR.
The OCR is typically increased to reduce the economy’s propensity to spend money (AKA reduce demand) to cool an overheated economy, but also to put the central bank in a position where they can drop the OCR to stimulate demand in future, as required.
Inflation is a key indicator (and cause for concern) of an overheated economy; hence the RBNZ has started on the path of OCR increases to cool the inflation before it creates instability in the economy.
However I do not believe that OCR increases are the right tool to reduce inflation in this case, and I believe that OCR increases may actually harm the economy.
I say this because while increasing the OCR is a great way to keep price increases in check that result from a flourishing economy, that’s not what’s happening here. Instead we have a performant economy that is threatened by high prices due to supply issues.
The difference is subtle until you consider a supply and demand diagram.
If we consider a supply and demand diagram, we can see that as an economy performs well, participants have an increased propensity to buy (increased demand) and this pushes up prices. In this scenario, increasing the OCR is a great way to keep demand in check by presenting buyers with a more preferable alternative of a higher ROI for their money in the bank and reducing their debt levels. The below supply and demand diagram illustrates an increase in demand due to a flourishing economy.
Unfortunately our economy isn’t suffering from increasing prices due to increased demand (much). By far the greatest pressure on prices is due to a lack of supply caused by COVID related logistics issues and other supply constraints (lack of lorry drivers, shipping queues at ports, labour shortages, semiconductor shortages, etc.). This is represented in the below demand and supply diagram, which depicts the effects of a reduction in supply.
Let’s have a look at what happens when the OCR is increased to reduce demand along with the already reduced supply.
As we can see from the above diagram, when the OCR is used to tackle price increases from a reduction in supply, one of two things can happen:
In both scenarios we see a drop in trade and most likely this won’t fix the inflation problem (at least not without significantly damaging the economy). A drop in trade means a poor economy, job losses, business closures / contractions, etc.
I would argue that as the economy isn’t overheating and is performant, that minimal interference is appropriate. Also, as a lack of supply is causing price increases and the government can’t fix the lack of supply (I won’t discuss policies that could help remedy this situation right now), we’ll just have to try to cope with the increases in prices for now and suffer the consequences (which could mean permanently higher prices in some industries).
Finally, I will leave you with a definition of poverty, where poverty is described as people not having things (lack of supply) and not being able to afford things (high prices).
I think that what has helped me improve my ability to value companies the most over the years is thinking about different aspects of valuations, and getting experience with different companies and the situations / people involved – all of which have an effect on valuations.
One of the most difficult things about that is getting the right experiences that lead to the right things to think about, because experience takes time and it’s difficult to know where to start. To that end, I figured an article about doing valuations which focuses on the thinking around valuations might help beginners.
To be clear, the aim of this article is not to teach you how to do a valuation. Rather it’s to get you thinking about how the valuations you do relate to your financial return and your situation.
This isn’t a planned set of thoughts, I’m just going to freewheel it and see what comes out. So let’s dive in!
How much do you suppose a theoretical company is worth that doesn’t do anything, doesn’t have any costs and has $1m in the bank? It could be argued that it’s worth $1m, right?
But then why would you buy an entity that has the same value as money, but is less fungible? For all your efforts, all you could do is get your $1m back if you drained the money our the company’s bank account, then it’d be worth nothing. Perhaps we can say that actually it’s worth $1m, minus the value of your effort to extract the money and do the valuation, minus the profit you require for doing that work?
But what if you got it wrong and it turned out that the company had some hidden debts? Maybe that same company should also have a risk premium removed from it’s value to cover off some percentage change that you didn’t do your due diligence properly?
How much do you suppose a theoretical company that earns $10k every year is worth? I suppose in part it depends how much percentage of your money you want back each year. Say that company pays all the money out in dividends and you’re getting 5% pa from having your money in the bank, you might want at least 5% pa return from the dividends to match the bank (which we might consider the risk free rate). That would value the company at $200k ($10k / 5 * 100). I suppose you’d probably want to deduct a risk premium, etc. as in the previous example, so actually it’d be worth less than $200k.
What if the company earned $10k pa, but retained those earnings so you could never get them? Would that affect the value? Would it even be worth anything? Perhaps if you can buy the entire company then you can make them pay you out? Perhaps there’s another shareholder with different goals to you and wants to keep putting the money back into the company to try to grow the company? How does that affect the valuation?
How much do you suppose a theoretical company that earns $10k a year, but grows it’s earnings by 14% pa is worth? It wouldn’t be fair to ascribe the same value as the previous example because in 5 years of compounding return, the company would be returning double the yield. Perhaps it’s worth double? But then in 10 years time it will have doubled again. Perhaps it’s worth quadruple? But then you’re paying the price for a company now that’s actually a future version of itself. Somewhere in between there’s the right price. Maybe this depends on your investment time-frame, how much risk you think there is to future earnings and other opportunities that are available at the time? Here’s a set of graphs I’ve made to try to solve this problem (hint: I use these a LOT).
Hopefully that’s given you something to think about that you can apply to the logic you use in investing and valuing. What other considerations might impact how you value a company? Leave a comment below and we can continue the conversation and improve our thinking together 🙂
A DRIP is also known as a DRP and stands for Dividend ReInvestment Plan / Programme. It is a way for company’s to offer shareholders a dividend in the form of money, equity or a combination of the two, at the choice of each shareholder.
Company’s can offer shareholders a dividend or equity. This is a good way to raise capital for the company because the value of the company is set to the market rate (usually a 2% discount), while a capital raise (CR) tends to be at a bigger discount because investors have to be enticed to invest and the increased supply of shares lowers the value of the CR, causing more dilution to existing shareholders.
I don’t like DRIPs because the amount of money raised is uncertain, so it’s not a good way for a company to plan usage of funds, which means the money raised (or rather retained) doesn’t get spent efficiently. If it was determined that capital was needed, it’s better to know how much, then use financial models to determine that the investment will give greater returns than the dilution. If money is perpetually useful to the company for growth, then it would be better to financially model CRs so they can be most efficient in terms of growth vs. dilution and also plan the risk of the investment in appropriate stages of approach.
My other problem with DRIPs is that (unless the company is an investment vehicle such as a managed fund) the company is not an investor. What I mean by that is that it’s the company’s job to run the company and an investors job to be in charge of their own investments. When the dividend is made available, the DRIP might not be the best place to invest at the time, so it’s unreasonable for a company to instate a DRIP to satisfy those shareholders who don’t want a dividend vs those who do. This is because the tax implications are the same and it’s not ideal to forcibly dilute shareholders who have better places to invest their money.
Finally, I don’t like to invest in DRIPs because it removes my ability to choose the best time and place to invest my dividends. Taking the market value at whatever price it might be relies on other investors to determine the price and therefore value of my investment. This is bad because what is a good investment for one investor might be a bad one for another. For example, an investor might pay a higher price for security, while another might not value security as much and find such an investment expensive. This concept is evident by the fact that different stocks find different prices based on different valuation algorithms – otherwise it wouldn’t matter what stock you bought as long as you diversified, which clearly isn’t the case.
Arguably DRIPs have a place in Exchange Traded Funds (ETFs) as the investor effectively hands off their role as investor and the company they buy into manages that role instead. The ETF would want to offer a dividend so it can be used as a passive income (otherwise hands off investors would need to actively manage their holding to create an income, which doesn’t make sense if you’re buying a managed investment).
The ETF would also want to give people a way to passively reinvest to grow their savings. In this case a DRIP is ideal and there’s also the benefit that as reinvested dividends would increase the value of the fund in a fungible fashion; investors taking the dividend are effectively not diluted because they still own the same amount of value in the fund.
I recently had an interview with the nice folks from Snowball Effect, which is being used as content to write three articles, the first of which came out today.
It’s a well written piece that touches on some of my comments on the difference between investing in listed stock vs private equity, psychology around investing and some other factors of investing.
While the interview was very friendly and both the interviewers and I both had the same goal (to produce helpful information about investing), it was very interesting from my perspective because it was an insight into what it might be like to publicly represent an entity.
This got me thinking about some of the issues businesses might have with public communications. While I have a bit of experience with this subject, I have never been responsible for non written communication (except in a few trade shows and the like). So today I thought I’d write a little about my thoughts on the challenges of PR and being quoted.
Generally speaking the main forms of PR representation that give rise to quotes are written communications, interviews and public speaking (speeches, presentations, etc.). These are very different forms of communication because they each have different levels of interaction (which leads to distractions), control and skill required.
Written communication is by far the easiest of the three because you can fully prepare, take your time and there are no distractions. This means that you have absolute control over what you put out to the public, you can analyze what you wrote before publishing it, which means you can look for ways that people could misinterpret or corrupt the meaning in your words, and generally stop yourself from presenting poorly.
Public speaking is a little harder than written communication because you have social pressure; people might react to what you say (you might get clapping, booing or heckling). People’s reaction or the possibility of reaction might affect how well you communicate, though you can practice for this with groups like Toast Masters.
Nevertheless, with public speaking you are still in control and you can prepare in the same way as you can with written communication. There is just greater scope for errors. That said, it does have the benefit of being able to show some personality and charm, which is more difficult than with written communication. Also people can see your face, which means that peoples reaction will be different to written comms (think about how differently people treat others in a car vs as a pedestrian).This aspect may make it a more appropriate way to communicate certain types of information – such as apologies or things that require ‘spin’.
Interviews are easily the most difficult form of communication. You can walk in prepared, but get misdirected by the interviewer and end up talking about something completely different. You can have thoughts that distract and misdirect you even mid-sentence. Such thoughts could be about the subject matter or social matters (for example, you may be thinking “What does that look on the interviewers face mean?” or “Are they trapping me with this question?”).
There are also issues that as your speech is free, you may not communicate your point well. This gives rise to being quoted in a way that makes you look dumb or doesn’t present your whole opinion. For example, your rhetoric could reference something you previously said, which when quoted makes no sense without the former words.
My takeaway is that when talking in interviews, you should always ensure that you make your point clearly and ensure that whatever the distraction, always finish what you were going to say before discussing the next item.
Fortunately for me the folks at Snowball Effect had no such mal-intentions, but given that I’m not a skilled interviewee, I wanted to take this opportunity to expand on some of the ideas touched on in the article.
“Prior to that, I’d been swimming around in the pool of sharks that is the NZX and ASX, which was great. But SuiteFiles was interesting. As a private equity investor, you’re not quite in the business, but you have to be business-minded. Whereas when you’re investing in listed stocks, you don’t have to be as much.”Lewis Hurst
This first comment about the pool of sharks was a little jest about trading public listed stocks. It’s actually not too bad, but there are some shady companies out there (I won’t talk about specifics) and it does feel like there’s a bit of stock market manipulation going on sometimes, though that doesn’t bother this investor. I find that NZX listed companies tend to be more honest than those listed on the ASX in terms of the reliability of forecasts, though this is entirely just my opinion and I don’t have anything to back this up. I also believe that there is some insider trading that happens with many of these companies.
I found investing in SuiteFiles interesting because it is a closer nit community of investors and directors, though I would say that this definitely isn’t as much the case with my smaller private equity investments.
My comment about being business-minded with private equity is such a small quote with a lot behind it. When you are involved in a company (especially a closely held company) as an private equity investor, you have to also think like a businessman. This means that you have to be watching out for tricks and be prepared.
A good example of this is when I was looking at investing in a tiny home complex a few year ago. The offer was presented as a business with the security of each investor owning their own part of the complex which was managed by the business. In fact the owners intention was to structure it in such a way that the business would allow her to unfairly allocate revenue through homes she owned before homes owned by other investors.
Interestingly in business actions can be seen as fair or unfair at the same time. It’s necessary to be business-minded to think about what is right and what action to take. An example of this is an entrepreneur that wants to take a large salary from a company you are invested in. This might be fair because a person doing that job might be worth that much, equally it might be unreasonable because the entrepreneur is already motivated by their large stake in the company, so it’s unfair to compare their package to someone who needs a larger salary to remunerate the position.
As a private equity shareholder, like a businessman you will have to consider legal implications of your position. This means that you will have to understand the intentions behind sections in shareholder agreements and company constitutions. Like a businessman you may on occasion have to strongarm people or even take people to court. Fortunately I’ve never had to do the latter.
“With private equity investments, you have to do a bit more research as there’s less published information available. Snowball Effect is great at putting together offers and making that information available. With the NZX there’s a lot more information out there, newspapers digging out information on an investment opportunity and industry commentary – which you don’t necessarily get with private equity investments.”Lewis Hurst
I think most of the above quote is pretty self explanatory, though it’s worth noting that although Snowball Effect does a good job of putting together offerings, you still need to do your own research because even for retail offers there’s a lot missing.
“Not just for a diversity spread, but also as part of a risk and reward spread. Don’t be put off with private equity, but if you’re nervous, start small.”Lewis Hurst
Again, I think that’s pretty self explanatory. I’ve talked before about building a strategy, and I believe that private equity can fit into this for many people, especially younger people or people who have already reached their financial goals and are both capable of enjoying the benefits more risk.
“Use your gut to protect you against the negatives, rather than persuade you of the positives. You can convince yourself that something is a good investment and then not put in the leg work that you need to with private equity investments.”Lewis Hurst
It’s really important to keep your emotions out of investing when decision making. Your gut can tell you something is good, but you need to put the legwork in to prove that it’s a good investment and find all the potential traps and things to be careful of. However if your gut tells you it’s bad, just don’t bother investing. You can do more research, but you might end up convincing yourself to believe the BS your gut is warning you about. It’s possible to be too open minded, sometimes.
“Investing can be complicated. There are so many things to learn, so many mistakes to make and so many ways of viewing things as well. What worries me about new investors is a lot of them haven’t thought about it much. Everyone’s been there. You start off in the stock market and the amount of research you do is looking at the line on the graph and considering whether you like the products being sold by the company or not. You feel pretty confident with yourself and throw some coins at it.”Lewis Hurst
I suspect that this quote might seem derogatory to some, but it’s really important to realize that there is a lot of work in investing. If you’re doing less than half a day’s work of research, you’ve probably not done enough research.
I see a lot of big ego’s with new investors who think they’re an expert because they bought some stocks that went up, but when they talk about investing it’s clear that they know next to nothing.
I think we can all suffer from egos (especially us men), and ego is the enemy of intelligence. Consider how little scientists of the past knew, but were so certain that they knew everything (leaches could be used to remove demons from the sick, the Earth was flat, etc.). It was only when we accepted that we didn’t know things that we were forced to research and ended up learning things. It’s very easy to stop learning at that point because your ego tells you how great you are, but recognizing that we can never know everything is the only way to keep learning and improving.
Personally, I need to improve my knowledge and experience in matters legal, accounting and business, and everyone can always benefit from working on our people skills.
“Don’t follow some formula that you’ve read about in an investing book. You need to relate the opportunity back to how you’re going to get money out of it and how much return you need that investment to make to fit with your financial goals.”Lewis Hurst
Reading this again, it comes across as though I meant to say that you shouldn’t invest based on whether the investment opportunity fits the values in a textbook, but instead whether it fits in with your strategy. That’s good advice, but not what I meant.
Additionally, I probably should have said “Don’t just follow some formula”, because books are great.
This quote was actually a reference to performing a valuation that matches your goals rather than how an accountant might perform a valuation. For example, you can apply a risk premium that’s relevant to the risk levels acceptable with your strategy, rather than what’s relevant to the business. This is a complicated subject, so I might circle back to this in a future article.
Lewis believes that Snowball Effect has simplified the process for investors and importantly, saved them time. “When Snowball Effect presents retail offers, they’re presented in a very easy to understand way.”Snowball Effect & Lewis Hurst
There’s actually a lot in this sentence that was discussed in the interview, but didn’t make it to the page.
It’s a massive amount of work between getting an offer from a company to making that offer investable, and Snowball Effect tidy up the offer so you don’t have to deal with any of the mess.
Based on past experiences investing without Snowball Effect, I have found that accounts aren’t correctly presented, forecasts don’t match reality (this includes incorrect numbers and unrealistic expectations), there are legal documents to create and agree which take a long time and costs thousands, etc. There’s months of time goes by to prepare all that and I notice that I don’t have any such issues when investing in offers presented by Snowball Effect. This also increases the quality of the offerings because I don’t have to deal with time wasters with madcap ideas about valuations, etc.
The downside to this however, is that I don’t get to see the abilities of the entrepreneur. For example, I don’t get to find out if they’re bad with their finances, projections or strategy, because it’s all presented nicely to me. I don’t get to find out if they have good negotiation skills or if they are a difficult person to deal with, either.
Finally it’s worth saying that because Snowball Effect handle all this stuff, they’ve enabled an entire market of investors and businesses that wouldn’t otherwise be able to invest or get funding through smaller investors. This is because for all the work it takes to get an offer ready and do the research, and the cost of the legals (thousands of dollars) it wouldn’t be worthwhile for each investor who is spending less than six figures on the investment. Snowball Effect has effectively made it possible to invest four figure sums in private companies, which otherwise wouldn’t be feasible. That’s pretty cool!
Prior to the censorship of my stock analysis on this website, long-time readers will have often seen me refer to my PE graph which I use to justify higher PEs for growth companies. The idea behind this is that if you’re investing based on an expected 5% ROI, you might be willing to accept a lower ROI in the earlier years of an investment that’s growing in exchange for a higher ROI in later years.
But what if a company has growth that is affecting the share price, but that growth is driven from external sources (such as market forces) or otherwise is not annually repeatable?
I would argue that some types of growth should not be represented by valuations that rely on multiples, such as a straight PE calculation. This is because the growth isn’t due to an underlying, repeatable improvement in the business, such as an increase in the number of stores.
Along that line, I would argue that growth of this type should be added to the overall share price (or tucked into a DCF as a one-off), rather than be multiplied out in a PE or DCF valuation where consistent growth is assumed.
Sometimes the market doesn’t always consider reasons for growth and the same old formulae are used with the new numbers. As a result, companies can be overpriced, even though they are selling at prices on the same metrics. This can only result in a drop of ROI when conditions fall back to normal in future years. This is how performant companies can sometimes become uninvestable (during or directly after a period of one-off growth).
I advise watching out for this when doing valuations, particularly at times like these where we are seeing changes in market forces which may be temporary (such as industries that have benefited from altering consumer patterns during lockdown).
If you do have your heart set on doing a PE valuation of a company that has grown in a manor that is not sustainable growth, perhaps you could consider altering your valuation to match this theoretical company valuation:
Company earnings: $100m. Typical annual growth 5% (affording a PE of 22, based on expected ROI of 5% in 2 years). Annual growth in the last year 10% (affording a PE of 24.5, based on expected ROI of 5% in 2 years). Assuming the next year will follow former years, we multiple $100m by 21 (PE of 22, minus 1), then add $111m (which is a ratio of the higher PE, divided by the lower PE and multiplied by earnings to account for one year of growth at the higher value of 10%), giving a valuation of $2,211m.
If you’re struggling with this logic behind this, consider that this is approximately (but not) the same as considering PE as the number of years you expect to get your money back, but considering one of those years as being at the abnormally higher rate earnings.
That said, you might just consider a PE of 22, then add the value of cash on hand, which will account for the boom year and distributable/reinvestable funds in the company as well. Long-time readers will know that I usually like to add net cash and equivalents to my valuations.
As I see it, there are 3 ways to get rich; These are: by getting lucky, by starting a business or by investing.
There’s luck in everything we do, whether it’s in business, investing, or any other part of live. But this way to get rich by luck refers to things like lottery wins or being born rich. This isn’t a valid strategy to make yourself rich, and if it were, it would be mega risky and really fast (assuming you were lucky straight away). Clearly gambling is not a strategy for getting rich that you should consider.
This method is more work that getting lucky. In fact, I would say that creating a business is the most work of the three ways to get rich. I would say that it’s medium risk (less risky than gambling, but more risky than investing) because compared to investing, you have all your eggs in one basket (in terms of money and time). The benefit to starting your own business (as a strategy to get rich) is that it’s a faster way to get rich than investing. When you consider that luck isn’t a strategy, I would say that creating a business is the fastest way to get rich.
Finally, this is the slowest way to get rich, but it’s also the most reliable and least work (excluding getting lucky, which isn’t really a strategy to get rich). This is good news because anyone with a regular job can become an investor, which means than anyone can become rich with time.
Every now and then I get asked about angel investing. Questions such as “What is an angel investor?”, “How do I become an angel investor?” and “What do I need to become an angel investor?” are common and sensible questions.
Let’s start with the most obvious place to start, and easiest question to answer: What is an angel investor? Most simply, an angel investor is a person who invests in companies that are not listed on the stock exchange.
In a word: size. An angel investor is typically investing 4 to 6 figure sums of money, while a Venture Capitalist (VC) is typically investing 7+ figure sums. Angel investors are typically one person, while VCs are typically a group of people or a company. While angel investors may or may not have things to offer the company above money (mentorship, contacts, etc), VCs typically have more expertise and may even have teams dedicated to assist. Another difference is that an angel investor may not require a position on the board, while a VC almost certainly will want a position. VCs tend to want a larger share of the company and may be more ruthless / pushy to deal with (which can be a good or bad thing).
This is probably the most common question after “What is an angel investor?”. Realistically though, the first question to ask should be “Should I become an angel investor?”.
This is an important question because for most people, angel investing won’t fit in their investing strategy and they won’t have the skills required to be an angel investor.
Angel investing is illiquid, meaning that often it’s extremely difficult to sell your shares. Typically the time-frame for return on your money is very long (5-10 years) and you have little to no control over your investment. For example, if the controlling shareholders decide they will never return money to shareholders because they want to keep growing the company, it’s difficult to do anything about that; hence angel investing doesn’t fit in most people’s investment portfolios. Typically you need a lot more money than you’re investing so that you have the option to partake in future capital raises (so you aren’t unfairly diluted) or sue the directors if things turn bad.
Angel investing also requires a lot of skills, experience and effort beyond other types of investing. Not only do you have to be able to calculate value in a company, understand basic accounting and have an eye for picking companies (researching industries, headwinds, tailwinds, etc.) as with normal investing, you also have to be knowledgeable in legal matters; dealing with people; identifying risks, conflicts and darn right traps; and have business experience way beyond what’s required of a normal investor. Here’s a quick checklist for angel investors that I put together, which might give a clue about some of the requirements to be an angel investor.
If you’re still interested in becoming an angel investor, you might also research the differences between a wholesale investor and a retail investor. It is not the requirements to be a wholesale investor that are of interest, rather the lack of protection and expectation of knowledge that are worth exploring, because this gives a clue about the sort of things one must consider as an angel investor.
If I haven’t scared you off and you’re confident that you have the skills and finances to be an angel investor, and such an endeavor is an appropriate form of investing for your strategy, then I probably don’t need to tell you how to be an angel investor; you probably just need pointed in the right direction to start hunting down investment opportunities. In which case, I refer you to Snowball Effect, which is where I bought my first angel investment. Snowball Effect have a selection of well put together offers for retail and wholesale investors that take out a lot of the effort and (massive amount of ) time in getting the opportunity correctly prepared (business cases, swot analysis, business plans, checking the strategy, use of finances, legals, valuations, etc.), though ultimately it’s important to remember that even if you’re only a retail investor, the responsibility still lies on you, not Snowball Effect. So you have to know what you’re doing.
Following the new financial advice law that took effect in March 2021, I will no longer be sharing my stock market research publicly on this website.
I would like to take this opportunity to thank my readers and subscribers for all the warm regards and kind words I have received as a result of sharing my research. It’s been really nice to hear how useful this website has been to everyone.
I may continue to share general matters of discussion regarding this subject, but will not discuss specific stocks, funds or other financial instruments so as to avoid falling foul of the new law.
To anyone who knows me personally and wants access to my research, drop me a message and I’ll give you access.
I wish you all the best of luck with your investing endeavors.Lewis Hurst