The markets are weak and unemployment is rising. Investor confidence is at an all time low. This could lead to an economic recession.
Why are we discussing investing in such a volatile time?
In other words, market weakness is not necessarily a bad thing. If you are patient and willing to wait, it could bring you potential profits.
Before you invest now, however, you should ask yourself a few key questions.
1. Receive a free gift for the door or a meal at no cost
First, you get stuff for free! Goody bags are a common occurrence, mainly from brick and mortar businesses. One time I was at an AGM of a healthcare company and was given their in-house nutritional products, including vitamin C pills and menopause tablets. I also received other goodies. A packet of instant coffee was given by one instant coffee company, which was well received by all.
It doesn’t end there. There is also free food! Buffet style meals are a good option for smaller meetings of 50 people or less. If you are unable to stand in a buffet line and risk having your elbows and handbags pushed into your ribs while eating, then the food vouchers or bento boxes might be a better option. It’s still free.
There is also a free program you can view…
Although April and May are not the best times to celebrate the Hungry Ghost Festivals, you can still see hungry people rush to the food station after the meeting has ended. One AGM that I attended saw shareholders running out of the room and making their way to the food area before the directors finished.
I was also present at a five-star hotel when I saw shareholders take out plastic bags (which they obviously had) and grab a handful of chocolate bars which were set out on a table for everyone. They ate everything. It was clear that I couldn’t get any chocolates from them. ValueBuddies.com contributor to me once said something funny about how “any old auntie becomes the national sprinter when the food’s ready and prepared.”
If you are there for the food, (and there are many), then be ready to push, shove, and rush with your fellow shareholders in order to get to the front of the crowd. Don’t be surprised to see someone bring a trolley. This is something I read in the newspaper a few years back. These incidents may soon be a thing of past, as many companies are trying to curb unseemly behavior like this by giving out goody bags or vouchers instead.
Aside from the goody bags and free food, I was also present at a meeting in Malaysia when a shareholder sang a Japanese song as a way to praise a company’s performance. The chairman tried to stop him but he couldn’t stop him singing for several minutes. They ended up cutting his microphone and the chairman thanked him for his efforts and wished him all the best. It was one of the most memorable AGMs I have ever attended!
2. Informational advantage
You can see that I don’t attend AGMs for the free food and goody bags. I attend AGMs to enjoy the delicious bits, such as talking with the CEO, CFO, chairman, auditors, and other company insiders. This allows me to access a lot more information than what is in the annual report or any analyst report.
Shareholders can ask questions of the board during the meeting. The answers are usually more political correct. Post-meetings are a great time for shareholders to ask more difficult questions. I have found that most management will be more open to answering your questions. Directors are more likely to share sensitive information about the company face-to-face than they would share publicly.
You will notice that smaller companies have fewer investors. Their AGMS ends much faster than larger AGMs. This allows you to ask more questions and get answers that can be very insightful and informative.
Large AGMs can be very informative. Berkshire Hathaway’s AGM, which is the largest in the world, draws over 40,000 people! Investors from all walks of the globe flock to Berkshire Hathaway’s AGM for one reason: to learn from Warren Buffett. ( In 2016, I flew to Berkshire for the AGM. Massive.
3. Determine if the management is aligned
You can determine if directors are truthful and aligned with shareholders’ interests by observing their body language.
An AGM was held many years ago. I recall a former chairman of an Sing-listed company boasting about how its social networking platform, which combines gaming and e-commerce, is better than Facebook. Although it was quite bold, I checked and found that not one person had ever heard of the platform. Last I heard, the CAD had taken the chairman to court for violating the Securities and Futures Act.
My rule of thumb is to avoid managers who try to sell investors pipe dreams. They will often claim that their product or company will become the next Facebook, Google or Amazon. While it’s fine to model after other successful industry peers, I find it alarming when management promises a far-fetched dream while their actions speak the contrary.
Although observation is subjective, it’s better to meet and interact with the management to get an idea of whether or not you can trust those who will be investing your hard-earned cash.
Shelby Davis, one the most successful investors of all time, stated that face-to-face meetings are the best way to separate the doers from the bluffers.
4. Find like-minded investors
Talking to other investors can help you gain new perspectives on why others invested in the same company. It is possible to discover new distinctions which could improve your analytical and research skills as an investor.
If you really get along with them, they may invite you to their private mastermind groups for investment discussion. Once you are invited, you won’t even know that such a group exists.
Network, network, and network. But be selective about who you speak to. I prefer to speak to smart investors who want to understand their investments and ask questions during the AGM, rather than shareholders who ask the same questions such as: Why hasn’t the share price gone up?
5. The directors might invite you to lunch
Although it’s rare, if you are liked by the management, they may invite you to lunch. This gives you an opportunity to ask deeper questions about the business. This was my chance to meet one of the top Hong Kong-based multinational conglomerates directors.
The lunch meeting was a great opportunity to learn more about the company in which he is chairman. I left the meeting knowing that my investment and the company were in good hands. That company is making great returns today for my stock portfolio.
How to attend AGMs
If you are already a shareholder, you can just go in person with your identification card.
If you are not a shareholder, you can buy an odd lot on the open market prior to the AGM. Make sure to buy before the closing day of the share registry. Odd lots are cheaper and less expensive than buying a whole lot of 100 shares. However, it is possible to get odd lots, so you might be better off buying one lot. This tip is very useful, especially if your decision on whether or not to invest in a company is still uncertain.