What Can Investors Learn From The Activist Playbook?
Investors across the market are always on the lookout for new information that could help them earn a buck, yet few of them seem willing to embrace a number of lessons literally staring at them in the face. Activist investors have been telling the rest of us how to make a profit for decades now, yet few people have taken the time necessary to sit down and read from the activist playbook. As it turns out, many investors can find enlightenment and useful insights from studying the behavior of activist investors.
Here's what we can learn from the activist playbook, and why it's something you should be regularly turning to for guidance.
The sky's the limit
Perhaps the most important thing investors can learn from the activist playbook is that the sky's the limit when it comes to earning a profit. Many investors are naturally cautious and hesitant to invest large sums of money even when there's little risk involved - after all, a single crash could wipe away their entire fortune! Activist investors understand that any company can find itself mismanaged and in sore need of guidance, however, so they're always prepared to invest in a company regardless of their pre-existing hookups concerning its industry or ownership.
Whereas many investors refuse to invest in certain areas on principle or due to a general distaste or ignorance of that area, the activist playbook calls for an open mind. You need to be prepared to invest anywhere, at any time, if the right opportunity arises. Activist hedge funds are always on the prowl of a fantastic opportunity, so don't be afraid to take a page from their book and copy their strategy for when it comes to keeping an open mind.
Regular investors can also learn from the activist playbook when it comes to seizing attention and keeping it; if an activist investor wants to really reshape a company and change the direction it's moving in, they must grab the attention of other shareholders. Whether this means making a hefty investment to scoop up many shares or simply coming up with an ambitious plan that can garner support, investors and mt4 brokers everywhere should learn the many benefits of being able to hog all the oxygen in the room. Activist investors who are incapable of enjoying the spotlight for long seldom make any profit, so keep that in mind if you're finding yourself fading into the background.
The activist playbook cherishes underperformance
Many investors see underperformance as a great enemy to be avoided at all times, yet the activist playbook recognizes that underperformance brings with it opportunities to change how a company is operated. As Forbes recently pointed out, investors should follow activist precisely because they generate results in an otherwise timid market where few people have the courage to act. Underperformance isn't a sign that you should be slowing down, in other words, but rather a sign that it's time to make a seismic shift in your strategy and move in a more positive direction.
Finally, investors should realize that activists aren't always the enemy. Many who are former members of a corporate empire can recall the grim reaction that many existing shareholders and board members have when an activist investor group pops up. Activists seem associated with a loss of sovereignty and an inability to control your own future. In reality, however, CEOs must learn to think like activists and be on the constant lookout for weaknesses which must be purged. In a competitive marketplace, anything less is suicide.
Investors who were quick to write off the activist playbook need to think again - it's a valuable source of information and could make the difference between turning a profit and losing your fortune on the market. While you don't have to embrace the activist playbook in its entirety in order to benefit from it, the more you learn to think like a renegade activist the more capable you'll be of weathering the market's shocks. Remember that earning money requires looking everywhere for advice. When it comes to the activist playbook, investors should learn to view underperformance as an opportunity and refuse to limit themselves when searching for possible new assets.