Wanted: Obsessed and Passionate Investors
Entrepreneurialism can only thrive in an individualistic society. Successful entrepreneurs create products, services or processes they believe will be beneficial to society. But they don’t do it out of charity.
They do it because of the flipside of helping society… the belief they’ll make a bucket load of cash from their idea.
Fortunately, even though the Australian economy has become more collectivist, it hasn’t gone completely down the Soviet road of 100% central planning. So there is hope.
But because the government is so involved in the economy (remember, total government spending accounts for around 35-40% of the Australian economy) it’s hard for entrepreneurial companies to make it to the big time.
And when they do hit the big time the rewards are huge. It’s like a pressure cooker effect… government rules and regulations keep entrepreneurs pinned down… but eventually, so much pressure builds up, a crack appears and a handful of ideas squeeze out.
Those are the entrepreneurs, ideas, and stocks I look for.
But entrepreneurialism isn’t just about inventing new gadgets. Entrepreneurialism is just as strong in places like the resources sector. It could be a tiny mining company looking for a resource in an unusual place.
Or a seemingly ordinary natural gas company developing a way of liquefying gas at half the cost of other gas companies (such as LNG Ltd [ASX: LNG], the stock I tipped in November 2008 and sold for a 242% profit one year later).
Our July stock tip is a good example of entrepreneurialism in the resources industry. It’s searching for and hoping to produce oil in an unusual location. And our latest stock tip is taking advantage of high prices to exploit a valuable resource.
But not every stock I look at is entrepreneurial. Most are. Because that’s where you get the real excitement from investing in the stock market… taking a punt on small companies with a clever idea.
That means finding some of the most creative, destructive and selfish people on the market. Those who aim to improve businesses and the lives of consumers… while at the same time earning a bundle of cash for themselves and their investors.
On this subject I’ll leave the last words to Brad Feld. Mr. Feld is the co-founder of TechStars, an entrepreneur-based reality TV show on Bloomberg TV.
Here’s what he says about the qualities you need to look for in an entrepreneur:
“Really you’re looking for amazing and credible people that are gonna be obsessed and passionate about whatever they’re going after.”
P.S. Finding Aussie companies with potentially ground-breaking ideas is what I do on a daily basis. The long days of research go towards producing a monthly investment newsletter called, Australian Small-Cap Investigator. That’s where I introduce subscribers to some of the amazing companies trading on the Australian market. Companies that – if they get things right – could give investors triple-digit percentage gains. It’s a high risk investing approach, but it’s also interesting and a lot of fun! Click the following link if you’d like to find out more about my small-cap newsletter.
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Written by Kris Sayce
Kris Sayce is Editor in Chief of Australia’s biggest circulation daily financial email — Money Morning. (You can subscribe to Money Morning for free here).
Kris is also editor of Australian Small-Cap Investigator, his small-cap stock research service, where he provides detailed analysis on some the brightest, smallest listed companies on the ASX.
If you’re already a subscriber to these publications, or want to follow his financial world view more closely, then we recommend you join Kris on Google+. It’s where he shares investment insight, commentary and ideas that he can’t always fit into his regular Money Morning essays.