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Forbes
01-08-2025
- Business
- Forbes
Building Investor Credibility As A Small-Cap Company: Why Expectations Are Everything
Cody Slach, Senior Managing Director at Gateway Group. I recently finished reading "The Psychology of Money" by Morgan Housel, a book I'd recommend to anyone navigating the world of capital markets. There's one line in particular that stuck with me more than anything else: 'Everything in finance is data within the context of expectations.' That single sentence crystallized something I've been observing for years, working with small-cap public companies: It's not just about the numbers you post; it's about the numbers people expect you to post. And for smaller public companies, that distinction can be the difference between a rising stock price and a credibility crisis. As a capital markets advisor, my job is to help companies communicate effectively with the investment community. But time and again, I see leadership teams doing a lot of the right things internally—making strategic hires, improving backlog, launching strong new products—yet still face declining share prices after earnings calls. Why? Because they slightly missed a top-line or bottom-line Wall Street estimate. Sometimes they missed those estimates by less than a rounding error. But the market doesn't care. In public markets, perception often outweighs progress. And the perception game is magnified for small-cap companies. Unlike large-cap firms, which are often followed by dozens of analysts and benefit from diversified investor bases, small-caps live under a narrower spotlight. The expectations placed on them—often by just a handful of analysts or a vocal investor group—can become gospel. And when those expectations aren't met, the market reaction can be swift and unforgiving. So, how can small-cap executives build credibility in this environment? It starts with deeply understanding that quote from Housel—that data is only meaningful when interpreted through the lens of expectations. That means small-cap leaders can't just focus on execution; they need to manage expectations as aggressively as they manage operations. Start With A Margin Of Safety The most credible companies I work with all embrace one discipline above the rest: They set expectations with a margin of safety. Why? Because: • Nobody can predict the future. No matter how well you plan, your quarterly results will always be vulnerable to timing issues, customer delays, macroeconomic surprises or plain bad luck. Sandbagging your guidance isn't the answer, but providing a reasonable buffer in your outlook can prevent small misses from becoming big headline problems. • The market's reaction is often emotional, not rational. Miss a number by a penny, and the market may assume your business is unraveling. Beat by a penny, and you could see multiple expansions—even if the underlying business fundamentals haven't changed. It's not always fair, but it's how public markets often operate. • Small-cap companies don't get the benefit of the doubt. When you're an unknown or emerging name, investors are looking for reasons not to believe your story. That's why misses, however small, can be disproportionately damaging. It takes months, even years, to build credibility and only one quarter to lose it. Communicate Like You Understand The Rules A company's investor credibility isn't just built by numbers; it's built by tone, transparency and track record. Some tactical approaches I recommend to executives: Don't assume investors will draw the right conclusions just because your internal KPIs look strong. Spell it out. Walk through how hiring, product launches or backlog tie into your future revenue visibility. And if you see risk to the quarter, don't wait—communicate. The best small-caps talk about their strategy, goals and priorities every quarter with the same framing. Consistency creates a narrative investors can follow. It also makes it easier for them to recognize real progress when it happens. If you fall short, acknowledge it directly. Don't hide behind vague language or blame external factors entirely. Investors appreciate candor and will usually forgive a miss if it's presented with accountability and a clear plan forward. Credibility isn't built by painting the rosiest picture. It's built by hitting the targets you set. Small-caps often face pressure to tell a "growthier" story, but overpromising to chase a higher valuation is a short-term win with long-term consequences. Credibility Compounds Like Capital Investor credibility isn't a quarterly game; it's a compounding asset. When investors believe in your leadership, your strategy and your ability to deliver (or at least to guide them honestly), you earn something far more valuable than a short-term bump in your stock price: You earn permission to be human. That permission means investors might stick with you through a rough quarter. It means analysts give you the benefit of the doubt when visibility is murky. And most importantly, it means you can gradually shift the narrative from short-term performance to long-term value creation. In a world where data is everywhere but trust is scarce, credibility is the ultimate small-cap currency. And it's earned by those who understand that numbers never speak for themselves—they speak only through the lens of expectations. Forbes Business Development Council is an invitation-only community for sales and biz dev executives. Do I qualify?
Globe and Mail
28-07-2025
- Business
- Globe and Mail
Market Factors: Some very bad advice from a venture capitalist
In this edition of Market Factors we'll show some great guidance for markets and life from venture capitalist Morgan Housel. Then I move on to how one ethically challenged industry is becoming even more cutthroat. The diversion covers a disturbing new trend of AI-assisted madness and as always we'll look ahead to important data releases for the coming week. There are few finance writers with better perspective than Collaborative Fund's Morgan Housel and he proved it again with the recent post called Very Bad Advice. Mr. Housel's goal is to underscore the complexity of success versus the simplicity of self-destruction. The bulk of the piece is a very long list of beliefs that can undermine success in both investing and life. One example is 'Assume learning is complete upon your last day of school,' an obvious tongue-in-cheek warning to keep learning throughout life. There are a few points of bad advice that struck me as extremely important for investors. The first is 'Forecast with precision, certainty, and confidence.' This is a reminder that any market-related predictions are just loose hypotheses and will almost certainly be wrong. All forecasts are to be held lightly and completely unrelated to an investor's ego. George Soros protégé Stan Druckenmiller once noted that Mr. Soros is the best trader alive because he knows when to abandon an investment thesis. I am guilty of 'Believe that the past was golden, the present is crazy, and the future is destined for decline' to the point I'm considering buying defence stocks, which I describe as put options on human psychology. Things are crazier than usual where politics are concerned but investors should not fall victim to fatalism. I also found 'View patience as laziness' as an important reminder for investors. Finance research shows conclusively that portfolio returns decline as the number of transactions increases. There are many times that the best thing to do in a portfolio is nothing. 'Adjust your willingness to believe something by how much you want and need it to be true' is another good one. I take this in a specific way that guards against a mistake I've made in the past, when I convinced myself an investment idea was great just because it was time to buy something. Readers can judge for themselves but I find Mr. Housel one of the few finance writers who is truly wise and his bad advice in this column is helpful during market hours and beyond. In what could be interpreted as a case of evil companies becoming even more evil, U.S. health insurers are implementing AI to streamline hospital operations and eventually cut jobs. BofA Securities analyst Alec Stranahan reports that the U.S. health-care system is a jumble of administration for patients, insurers and hospitals that often requires manual input of data. The opportunity for efficiencies is widespread and some insurers and large hospital systems are already implementing AI applications to tackle them. The stocks mentioned are new names for me. Doximity Inc. (DOCS-N), with AI applications to draft medical letters and appeals and communicate with patients, is one. Waystar Holding Inc (WAY-Q), with software to help simplify payment processing and claims denials, is another. Nashville-based hospital network HCA Holdings Inc. (HCA-N) is a leader in AI implementation in its own operations. News that an unstable teen had been dragged into madness by an AI companion would be lamentable but not surprising. Futurism's description of venture capitalist Geoff Lewis' apparent AI-assisted descent into mental illness, however, is eyebrow raising. Mr. Lewis was an investor in machine learning and AI expansion for a multi-billion dollar investment firm until a series of social media posts led to concerns about his health. The posts suggested that Mr. Lewis had used ChatGPT to uncover a shadowy organization that was negatively affecting 7,000 people and had killed more than ten people. The story is the continuation of a trend of AI encouraging users' delusional thinking to extremes that are being blamed for involuntary stays at psychiatric facilities, homelessness and even suicide. Mr. Lewis did not respond to requests for information for the story so we'll have to be careful in assuming AI's role in his difficulties. If it turns out that AI did play a significant role, it is alarming as Mr. Lewis has a clear idea of AI's inner workings. Looking for our updates on market movers, analyst actions, stock technicals, insider trades and other daily, weekly and monthly insight? Click here to visit our Inside the Market page. Norman Rothery hunts for the best measures of quality for both large and small Canadian stocks Ian McGugan looks at the staggering amounts companies are spending on AI and what it may mean for investors. Meanwhile, Jamie McGeever asks, Is the U.S. stock rally near a 'Mag 7' turning point? Tim Shufelt looks at how Canadians are learning the hard way that real estate is not a slam dunk when it comes to investment gains The Bank of Canada decision on interest rates on Wednesday is the key economic event for the coming week despite economists expecting no change in the policy rate. Month-over-month GDP for May is out Thursday when economists expect a 0.1 per cent decline. On August 1st the S&P Global Canada manufacturing PMI for July is released. There are lots of earnings so let's get right to it. On Tuesday we'll see George Weston Ltd. (C$3.352 per share expected) and Kinross Gold Corp. (US$0.318). On Wednesday there's CGI Inc. (C$2.083), Agnico Eagle Mines Ltd. (US$1.715), Canadian Pacific Kansas City Ltd. (C$1.13) and Toumaline Oil Corp. (C$1.031). On Thursday TC Energy Corp. (C$0.791), Cenovus Energy Inc. (C$0.157) and Cameco (C$0.469) report. Scheduled Friday are Fortis Inc. (C$0.702), Enbridge Inc. (C$0.579), Telus Corp. (C$0.232) and Suncor Energy (C$0.710). In American economic news there's annualized GDP for the second quarter out on Wednesday (2.5 per cent expected) along with personal consumption. The Federal reserve decision on rates is the same day, no change is expected. On Thursday there's personal spending for June (a 0.4 per cent month-over-month rise is forecast), and the monthly change in the PCE price index (a rise of 0.3 per cent is expected). The change in nonfarm payrolls is released Friday and 101,000 new jobs is expected. ISM manufacturing PMI is out the same day and economists predict a slightly contractionary 49.5 reading. Widely followed corporate results start Tuesday with Procter & Gamble Co. ($1.422 per share expected), Corning Inc. ($0.572), Johnson Controls International ($1.021), Royal Caribbean Cruises Ltd. ($4.068), American Tower Corp. ($2.428) and Visa Inc. ($2.847). On Wednesday there's Ford Motor Co. ($0.328), Equinix Inc. ($6.742), Meta Platforms Inc. ($5.878) and Qualcomm ($2.711). Thursday's profit reports include Mastercard ($4.022), Stryker Corp. ($3.071), Apple Inc. ($1.43) and ($1.323). On August fourth we gat Berkshire Hathaway Inc. ($7514.74) and Palantir Technologies Inc ($0.139). See our full earnings and economic calendar here
Mail & Guardian
28-07-2025
- Business
- Mail & Guardian
Start saving and make your money work: 5 practical tips from money experts
National Savings Month is a reminder of the importance of building financial resilience. Driven by the Savings Institute of South Africa, the goal is to promote healthier financial habits and encourage people to save for the future. It starts with being more intentional about how we manage, spend and save money, a theme explored in The Psychology of Money by Morgan Housel. This global bestseller unpacks how our financial decisions are shaped more by how we behave than by what we know. Housel reframes wealth not as what we earn or spend, but as what we choose to keep and grow over time. 'Building wealth has little to do with your income or investment returns, and lots to do with your savings rate,' writes Housel. Saving is also one of six financial behaviours identified in Discovery Bank research that secure overall financial wellbeing. Data from the behaviour-change programme, Here are five practical ways to help you save, and to protect and grow your savings: KNOW WHERE YOUR MONEY IS GOING To save, you need to understand your spending. Most people underestimate how much they spend and checking their bank account triggers anxiety, so they avoid it. Vangile Makwakwa, money coach and author of What's Your Money Personality?, known for her work on money and trauma, encourages people to look at their bank statements or transaction history daily. This practice she calls 'The Bank Account Challenge' reveals more than numbers; it reflects your emotional patterns and priorities about money. By getting comfortable with the numbers, you start to take back your power and can track where you can cut back. Budgeting and other tools can help. Discovery Bank's Vitality Money Financial Analyser, for example, automatically categorises your spending, helping you to make more conscious choices about how you spend and save. PAY YOURSELF FIRST One of the most effective saving strategies, recommended by Personal finance author Mapalo Makhu, in her book EARN BETTER INTEREST ON YOUR MONEY Keeping your savings in a low-interest account means your money isn't working as hard as it could be. Interest rates can vary significantly between banks and account types. Always shop around. Whether you're saving for a few months or a few years, you can pick a product that matches your goal and gives you a clear return. Fixed deposit accounts offer the highest interest rates if you can lock your money away for a longer period. Discovery Bank's broader approach to rewarding good financial behaviour such as building up savings mean their with 32-, 60-, or 90-day notice periods also provide better interest rates than instant-access accounts. Discovery Bank also has a 24-hour notice period option with a Dynamic Interest Rate you can control and maximise in line with your Vitality Money status. Some banks offer higher savings interest rates for larger balances and you can consider Tax-Free Savings Accounts that may offer slightly lower interest rates, however, the tax benefits can make them more rewarding over time. UNDERSTAND YOUR FINANCIAL HEALTH Saving is one of the most important behaviours for good financial health. A general rule is to have at least three months' gross salary in savings to soften a financial setback. Digital banking makes it possible to understand your finances and transact anywhere. The Discovery Bank app lets you track your financial health using six NAME YOUR SAVINGS Financial educator Get Good with Money says: ' Naming your savings gives it purpose, and purpose makes it harder to spend. ' Discovery Bank makes this easy, as you can easily change the nickname of any of your accounts based on their purpose in the banking app. Once you have savings, don't be tempted to withdraw money too often so your savings for your goals and the future are secure and can grow. This National Savings Month, take a moment to ask yourself: Am I saving with intention or just hoping there'll be money left over? As financial journalist Maya Fisher-French says in her
Forbes
17-07-2025
- Business
- Forbes
Luck Versus Skill: Truths Every Investor Needs To Know
Rodolfo Delgado is a Mexican Architect who loves New York City, real estate and tech. He's the CEO of Replay Listings. When people talk about investing, particularly in real estate, the conversations usually gravitate toward topics like property selection, market timing or financing options. Rarely do I hear people discuss two less obvious yet profoundly influential factors: the power of compounding and the dual forces of luck and risk. After spending over a decade in real estate and entrepreneurship, I've learned the true value in how these elements intersect and shape long-term investment outcomes. Let's dive deeper into these concepts and explore how understanding them can significantly improve your investment strategy. The Silent Force Behind Real Estate Growth Many have called compound interest the "eighth wonder of the world," and while real estate doesn't always deal directly with interest, it absolutely benefits from compounding growth. Simply put, compounding in real estate refers to how property values and income can increase exponentially over time when profits are reinvested. For example, early in my career, I witnessed a client purchase a modest apartment building in New York. At first glance, the building didn't seem remarkable; it had average returns and required routine maintenance. However, by reinvesting the rental income to make strategic improvements, my client incrementally increased rent and, subsequently, property value over several years. Eventually, the property appreciated substantially, far exceeding initial projections. As can be seen, even minor reinvestments can lead to outsized returns over time. To leverage this compounding effect, my advice is straightforward: Resist the temptation to quickly cash out on real estate profits. Instead, consistently reinvest a portion of your returns into enhancing your property or diversifying into similar assets. It's a simple yet effective method to accelerate long-term growth. Recognizing Luck And Risk Early in my real estate career, I experienced firsthand how easily luck can masquerade as skill. Shortly after entering the market (about a decade ago), I facilitated a transaction for a property in an emerging neighborhood in Manhattan. Within a few years, the opening of prominent stores turned the area into a much more desirable destination, skyrocketing property values. At the time, I credited myself entirely, thinking I had cleverly foreseen the market's future. Looking back, however, luck played a substantial role in that success, as the changes driving value were beyond my control or prediction. The truth is, I was lucky. In his book, The Psychology of Money, Morgan Housel brilliantly distinguishes between luck and risk. He defines luck as the positive outcome of events largely beyond our control, while risk refers to the opposite—the negative outcomes that come from similarly uncontrollable factors. Both play significant roles in investment outcomes, but few investors consciously account for their impact. My actionable advice here is twofold. First, remain humble and objective: When things go well, acknowledge the role luck may have played. Doing so helps avoid complacency and reckless optimism. Secondly, manage risk by diversifying across property types, locations and strategies. Recognizing that negative, unpredictable events can and do occur, thoughtful diversification ensures no single uncontrollable event can derail your entire portfolio. Allowing Time To Unlock Value One of the biggest lessons I've learned as an investor is the incredible value of patience. Real estate investing, unlike some quick-turn strategies, typically rewards those who maintain a longer-term vision. Just as with compounding, letting investments mature over time significantly enhances returns. Take my company's urban development ventures in Mexico as an example. We specialize in acquiring land on the city outskirts, bringing in essential services like roads, water and electricity, and then subdividing these large parcels into smaller, affordable plots ideal for small businesses and individual investors. Our investors who experience the greatest returns are consistently those who patiently hold their land, watching its value appreciate as the city inevitably expands outward. This highlights an important piece of advice: Before purchasing property, clearly define your investment horizon. When you enter an investment knowing it's designed to grow in value over a five- or 10-year timeframe, you'll be less tempted by short-term fluctuations or impulsive selling decisions. Patience in real estate isn't just a virtue; it's a strategic advantage. Using Uncertainty To Your Advantage Periods of volatility often reveal valuable opportunities. Real estate markets experience cycles, and downturns are natural parts of the investing journey. The key is not to avoid volatility altogether but to use it as an opportunity for strategic acquisition or consolidation. During the market uncertainty following the 2008 financial crisis and more recently during the pandemic, savvy investors carefully acquired undervalued properties in prime locations. They weren't speculating; they were strategically purchasing assets that met their long-term criteria, knowing full well the market would eventually rebound. When investing in real estate, it is essential to establish criteria and conditions beforehand that will guide your decisions during turbulent times. When uncertainty hits, you can move quickly, confidently acquiring quality assets at favorable terms. Embracing volatility as part of your investment strategy transforms market downturns from moments of panic into opportunities for strategic growth. Playing The Long Game Great investors aren't necessarily those who pick the perfect property at the perfect time. They're investors who deeply understand the value of compounding and appreciate (and recognize) the roles that luck and risk play. As you move forward in your real estate journey, continually remind yourself of these silent but powerful influences. By doing so, you'll position yourself to capitalize on growth, manage unpredictability and achieve sustainable, long-term success. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
India.com
13-07-2025
- Business
- India.com
How To Get Rich The Smart Way: Gen Z's Guide To Lessons From ‘The Psychology Of Money'
photoDetails english 2931180 The book focuses on the key insights on wealth-building through behavior, not just knowledge. From the importance of preserving wealth and avoiding lifestyle inflation to embracing patience, humility, and compounding, the story highlights lessons Gen Z can apply early in life. Instead of chasing quick riches, Housel encourages a long-term mindset grounded in self-awareness, discipline, and emotional control. Scroll down to read more. Updated:Jul 13, 2025, 03:03 PM IST About the Book 1 / 7 Written by Morgan Housel and published in 2020, The Psychology of Money is an amazing book that explores the thing which is often overlooked, the emotional and psychological side of personal finance. Rather than focusing on complex formulas or investment strategies and he talks about our mindset and it's importantance in handling our money. (This article is meant for informational purposes only and must not be considered a substitute for advice provided by qualified professionals.) Earning Wealth Is One Thing, Preserving It Is Another 2 / 7 Many people focus on how to make money, through hard work, ambition, or risk-taking. But the author argues that staying wealthy is a whole different thing. It requires qualities like humility, patience, and fear of loss. It's great to be bold while building wealth whether it's investing or starting businesses, but knowing when to stop and protect what you've earned is what will help you in the long run. Don't Let Your Spending Grow with Your Income 3 / 7 Saving money has little to do with income and everything to do with behavior. The more people earn, the more they tend to spend, often on things that don't bring lasting happiness, so the author says you don't have to increase your lifestyle every time your income increases. Money Means Different Things to Different People 4 / 7 One of the book's strongest messages is that there is no single "correct" way to use money. People behave the way they do because of their individual backgrounds, experiences, and beliefs. What feels smart to one person might feel risky or unnecessary to another. Everyone has their own situations and no one is crazy to react in a certain way. Luck and Risk 5 / 7 Housel says that financial outcomes are not always the result of skill or bad judgment, luck and risk play a huge role. Some people succeed because of good timing; others fail despite making good decisions. Recognizing this makes you more empathetic, humble, and careful. Let Time Turn Small Gains into Big Results 6 / 7 Housel calls compounding one of the most powerful financial forces, not just for investing, but in life. The trick is not chasing big wins, but allowing small gains to grow over long periods of time. Patience, not genius, builds wealth. Even small investments now can grow exponentially over decades. Conclusion 7 / 7 The book reminds us that building wealth isn't just about earning more, it's about thinking differently. By focusing on behavior, patience, and a long term mindset over quick wins or flashy spending, anyone can build lasting financial stability. In a world full of noise, Housel's advice is simple but powerful. He says that learn to master your emotions, respect time, and let your money habits reflect your values.
