The Hindu Business Line : Five Ms of gold investing

Mother Nature is heavily stacked against investors in gold exploration companies, yet you can find your way by using ‘the Five Ms’ strategy, say John Katz and Frank Holmes in ‘The Goldwatcher: Demystifying Gold Investing’ ( www.wiley.com ).

‘Market cap’ is the first M. In the case of large gold companies, an investor can establish relative valuation by measuring the market cap against production level, reserve assets, geographic location, the authors instruct.

‘Management’ is the second M; it is about the explicit and implicit knowledge of those at the helm. For example, “the ability to raise capital and to communicate are very, very important for shareholder evaluation.” A good executive team, therefore, is one with ‘great communication skills and one that appreciates both retail and institutional investors.’

Third is ‘money.’ When a company doesn’t make a discovery after spending its first couple of million dollars and it needs money to continue, the stock will fall, state Katz and Holmes.

Precious read.

Tiger teachings

Whether your goal is lowering your weight or your golf score or raising your tax bracket, your actions should not be governed by a cookie-cutter template but by your intuitive sense of what is the right thing to do on a daily, weekly, monthly, and annual basis, advises Brad Kearns in ‘How Tiger Does It: Put the Success Formula of a Champion into Everything You Do’ www.tatamcgrawhill.com.

The author defines ‘intuition’ as “a blend of instinct; critical thinking and reasoning; common sense; awareness of mental, physical, and emotional states; and an ability to see the big picture of your life and your competitive goals.”

What is the opposite of the intuitive approach? An obsessive-compulsive approach, where ego demands and other negative influences create a disconnect between mind and body, cautions Kearns. “If you doggedly pursue material success, brazenly sacrificing your health, your family, and a balanced life to work longer and harder than the competition, you will most likely succeed by rat-race standards.”

He concedes that it is tough to downshift from the Type-A mentality we’ve been conditioned to adopt for success and cultivate our intuition. Yet, reassuringly, we all have the ability to be intuitive; it’s wired into our basic nature as human beings, says Kearns. “Even simple behaviours such as yawning (an attempt to increase energy levels by inhaling deeply), sighing (an attempt to relax with an extended exhale), or going to the restroom are good examples of a strong mind-body connection and intuitive decision making.”

Suggested study for wannabe champions.

Business survival tips

Running out of cash is a major cause of business collapse, warns Robert Ashton in ‘The Entrepreneur’s Book of Checklists: 1000 tips to help you start and grow your business,’ second edition www.pearsoned.co.in. The problem can happen in fast-growing businesses too, with demand for working capital rising along with turnover. “See it coming,” urges Ashton. “If you use a spreadsheet to forecast your cash flow accurately, you will see the danger signs a few months in advance. Act early and you can turn it round.”

Chase the debts, he exhorts, as another tip to avoid running out of cash. If you are busy, then making sure you get paid often slips down the priority list. “Focus on the profitable,” reads yet another tip. “If you have unprofitable activities or products, consider ditching them. Too often we hang on to the stuff we should really let go.”

Also, shift stock, by liquidating what you no longer need. “Take junk to an auction and get rid of it. Get tidy.” Similarly, get tough, in squeezing money back into your cash flow.

See if you can be tough with yourself too, by stopping your pay for a month. That way, you can show those around you that you are committed to winning, says Ashton. “When things are fixed take a bonus!”

Survival kit for those running businesses.
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