"Why did I start InsideMarket with such a transparent style and what is your Fund’s investment strategy?"
Well, I started my first business in 1993 after working as journalist and senior producer for every major TV and radio network in Australia.
Being a strong advocate of planning, I developed an in-depth strategy around:
"The five functions of management and incorporated contingency, systems and chaos theories."
Truth is, I have no more formal education than I was legally allowed to escape.
I started my video production business in a condemned building because the rent was cheap.
And my marketing strategy hinged on spending my time flicking through the Yellow Pages.
The Yellow Pages by the way, was an offline, giant hard copy reference book containing business phone numbers.
Also great for raising the height of your enormous cathode tube computer monitor.
The reason for scouring the phone book was to find companies with products too big to take out to demonstrate.
I figured they might need a video.
Turns out they did.
"In one year with one employee, me, I turned over $700K+."
Which leads me to the InsideMarket Strategy.
Just as with the video business, InsideMarket.net has been set up to provide value for me and for subscribers.
That value lies in my experience (business and journalistic) along with my constant desire to increase my knowledge of both technology and the share market.
As I write the InsideMarket Private Fund is up 46.3% (December 22nd 2017)
We use the Darvas Box method as one of our technical timing tools
I love learning.
That's ironic given I left school at 16 and my reports were littered with the phrase ‘could do better if he applied himself’.
Technology is the ideal target area for a person who truly loves to learn because it is constantly changing.
"At the moment that pace of change is insane and the potential incredible."
During an early InsideMarket.net interview I learned something simple, enormously logical and so far, pretty valuable.
Jim Dorrian is the non executive Chairman of 4DS Memory Limited (ASX:4DS).
Jim founded a company that sold to Oracle for $4 billion in 2007 and continued his venture capital success as general partner at Crosspoint Venture Partners, where his deals included Bill Me Later's $1 billion acquisition by Paypal in 2008.
But in his current role with 4DS Memory, I was lucky enough to score an interview with the Silicon Valley veteran.
"Find people that are trying to do something really hard. Make sure they have very smart people working on it and the market for it is absolutely enormous” he said.
Since then I've used his simple explanation as my first-stage filter for identifying exciting, massively disruptive companies.
To me it is so logical.
But I also knew that even after a lot of deep research I was still in a fairly high risk position.
So to mitigate that I developed a tool to try and time my entry into a company that fitted the ‘Dorrian Concept.’
I call it the Evolution Techline and it is as follows:
What I have discovered is that having found a company and want to invest it is best somewhere between 6 and 8 on the techline.
So far this seems to offer the most upside while further reducing the risk.
We have had one payoff of almost $100k in our first four months and I am very optimistic about the first quarter of 2018.
Of course there are few guarantees in life accept death, taxes and if you live in Australia, unstable internet.
It has been my experience that stocks in the 6 to 8 zone are often misunderstood by investors and they don’t see the full potential.
That or they lack trust or are just plain impatient.
I have grown to love the inefficiency of the market.
A common statement by many of the top fund managers I have interviewed or had as clients through the production business is “Investing is more art than science.”
That’s why I started the website InsideMarket.net
Because even with the most sophisticated filters - and I am not bragging that mine are anything like that, you still have to try and isolate the technology ‘stories” from the truly disruptive and mass-market opportunities.
In other words the art - the human element if you like.
I have interviewed literally thousands of people as a journalist.
From sports legends to rock stars, kings to prime ministers.
I am not saying that this experience makes you a human 'lie detector' but it does afford you the ability to get a unique feel for a person and hear the warning bells of insincerity, uncertainty or sometimes straight out flim-flammery.
Out of all the skills a journalist must have, interviewing is something I have done fairly well at and found enjoyable and now, rewarding.
For example more than six months ago I interviewed Mike Pivac of Fast Brick Robotics.
Prior to the interview I'd done considerable analytical and grass-roots research (there has to be some secret sauce) around their patented technology.
That, coupled with where the company sat in our tech time line led me to concluded it was pretty solid.
So I just needed to complete my due diligence through the interview (hear full interview here) and eventually posed the question.
“So what could go wrong from here?"
“It’s funny you should ask that. I have been asking myself the same question and I really can’t figure out what could go wrong.” he replied.
In my opinion, taking into account their Dynamic Stabilization Technology and its implications, their index position of between 6 to 8, our extensive grass roots research and you really had a timing decision, not a “should we invest decision?”
Titomic recently signed deal with North American
multi national to develop titanium sprayed push bikes
That is why we have a large position in Fast Brick as well as Getswift (ASX:GSW), Titomic (ASX:TTT), 4DS Memory (ASX:4DS), Pointerra (ASX:3DP) and AudioPixels (ASX:AKP)
While I do not include myself in the following category I think for the purposes of investing the following is incredibly salient.
“A wise man has more questions than answers.”
One of the many appealing elements about Australia as an investment market is it’s tight regulatory framework: largely preventing the hyping of stocks and ensuring fair and timely disclosure.
But if you ask the right questions you’d be surprised what you can learn.
Which leads me to my conclusion and what I call the ‘virtuous circle’ we have built InsideMarket.net around.
I think transparency is the new 'real' currency.
Blockchain and Bitcoin are simply manifestations of transparency.
Technology is opening things up in ways we never thought possible.
Below: A row of AudioPixels digital speakers
It can sometimes be uncomfortable or downright confronting but I think it is here to stay.
And so because my investment strategy is built around the ‘Dorrian Concept’, the evolution index and the human element that makes up the art of investing, I recognized that I needed to provide a reason for C-level executives talk to me.
I needed to be able to offer them some value and in this case it is exposure to a very specific type of sophisticated and educated investor who gets them and can be reached as a subscriber via InsideMarket.net
In return for subscription I could think of no better reward than total access to our Private Fund’s positions, decisions, news and information.
A virtuous circle that hopefully benefits all involved.
Merry christmas and as always, “We do not offer financial or investment advice.”