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Strategies & Market Trends : Due Diligence - How to Investigate a Stock -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (6)	3/25/1999 12:54:00 PM
From: Rob	Read Replies (1) \| Respond to of 752

Great thread. I personally find that calling the company is good for more than just hard data. The key is to talk to more than just IR (but to include management and sometimes its possible get to know some of the employees, e.g. lab technicians, mining personnel etc.) and to ask them smart tough open ended questions about the business (not ones with yes or no answers); and evaluate the replies. If possible visit in person and read body language and facial expressions. Develop the questions by asking yourself what questions would you would want answers to if you were buying the entire business and where does the risk lie? Often it is not what they say but what they don't say, what they avoid and how they say it. Don;t be afraid to ask to see agreements etc.. Questions are free! The key is in the questions and listening. An investor not talking to company management he is considering investing in is similar to an auditor not interviewing the management of the company he is auditing (how can you tell, I am an ex-auditor):). I invest in primarily small cap stocks on the VSE, ASE, TSE and NASDAQ. I call on the company regardless of the exchange on which the stock trades (although for many reasons do not invest in anything on the OTC BB). Some investors believe this is going to too great a length. My position is if an investor cannot bring himself to do this type of due diligence he/she should instead invest in mutual funds. Regards Rob