PROMOTION PROMOTION
“You can have the greatest product in the world, but still go broke if no one knows about it” is an old business adage.
In more instances than I can remember, I’ve come across a well-run company turning up strong results… and the shares of the company are selling for pennies.
In these cases, the missing element is “Promotion” — the fine art of being able to communicate your story to the broad community of investors and analysts. I have a soft spot in my heart for these companies, which are typically run by scientifically minded individuals who sincerely believe that if they do their work well, the market will eventually discover them. While that occasionally happens — and finding an under-promoted company can offer us a terrific opportunity — more often than not these companies run out of cash and are unable to raise additional financings… at least at a cost that is not usurious to shareholders.
So, promotion can be a good thing. It can, however, also be a bad thing when a company is built solely around promotion. It is that kind of company that proves true the old Mark Twain quip that a gold mine is “a hole in the ground with a liar standing over it.”
If you do your homework, however, it won’t be long before you’ll be able to tell the real cowboys from the ones that are all hat and no cows.