Enthusiasm is Contagious in Investor Meetings
Posted by
Beth Kurth on Fri, Jan 27, 2012 @ 03:44 PM
Isn’t it interesting that so many of the recent Noble prize winners for economics are those involved in the field of behavioral economics? This, of course, is the field that says that humans aren’t so rational after all. That we don’t always make decisions based strictly on reason. In the investing realm, there are often other factors at plan including loss aversion, mental accounting and cost basis anchoring.
And while no one has yet received a Nobel that isolates the impact of emotional economics, a long-time small cap investor recently reminded me of the importance of enthusiasm in an investor relations presentation. He said, "Tell your speakers to be enthusiastic, even if that's not their natural personality and even if it's a one-on-one.”
Whereas IPO roadshows are inherently interesting – new is always interesting – non-deal roadshows have an opportunity to create their own ambience. Publicly traded companies can choose when to go on the road, where to go on the road, and even who to send as a speaker.
Enthusiasm is contagious. Look at me! Lots of exclamation points! This is a high energy engaging presentation! Enthusiasm can keep you engaged as a speaker, and can spread to the audience to ensure a memorable presentation. Conversely, a dull delivery can sap the motivation of even the most ardent investor.
Enthusiasm does not have to equate to false humor or insincere chumminess. Rather, it is the quality of being involved and interested. The best presentations are given by speakers who understand that they are role models for their audience. If the speaker is enthusiastic, and delivers an investment thesis accordingly, the audience is likely to be infected with a corresponding level of interest.