About Us - Background
The original InvestorsGuru.com was among the first and foremost financial sites, with many TV, magazine and peer references about its large online investor community. Often copied but never duplicated, founders of many financial sites now claiming to be the biggest and the best were Investors Guru members, long before starting their own site.
From its inception in 1995, Cecil Musgrave has been Investors Guru's Editor-in-Chief. Prior to this Mr. Musgrave worked for bank owned and private brokerage firms. In 1988 he completed the Cdn. Securities Course, and while registered as an investment advisor expanded his licensing by completing the RR Manual Exam, Cdn. Options Course and Cdn. Futures Exam. His securities credentials also include the Certified Investment Manager program, conferring the CIM and FCSI Fellow of the Canadian Securities Institute designations. Mr. Musgrave was also a director of Starpoint Goldfields, a Congo Africa gold and diamonds explorer listed then on the VSE. He has also owned and operated several private businesses, before and after working in the securities industry.
Most of Mr. Musgrave's individual and institutional clients were portfolio investors. However a small group of them were seasoned active traders, focusing on lower priced, higher risk, mining and technology stocks. They wanted details, insight and reports like any investor, but instead had to rely mostly on technical trading trends and gut instinct.
Most brokerage analysts simply do not follow stocks under $5, more commonly referred to as penny stocks. These stocks often do not have much, if any, fundamental value to base an investment decision. However some do have real businesses, or at least have a good shot, but still do not attract analyst attention. Often this has more to do with size, than actual fundamentals or business growth outlook.
Large capitalized stocks with high trading volumes generally offer more opportunity for brokerage houses to earn underwriting fees and trading profits, than for small cap stocks. The CEO of a small cap company may present to a major brokerage firm only to be told, "your business fundamentals and growth potential are rock solid, but you're just not big enough yet. We'd love for you to come back when your stock gets over $5."
Yes, small cap stocks are very risky! But major brokerages and some of their large cap clients have seen their share of conflicts and scandals too. Ask any Enron, WorldCom, Bre-X Minerals, Lehman or AIG shareholder. More of us now realize that if we do our own homework, making informed, balanced decisions, we may actually do better. Small cap stocks may have high growth potential, but should only be considered for a small portion of a diversified portfolio, and only if your risk tolerance can handle total loss.
Investors Guru was formed in 1995 as a small cap stock club, to share ideas, insight and information. It immediately took off, attracting thousands of members and millions of page views monthly. From area plays like the Voisey's Bay nickel-copper-cobalt discovery, to major gold, diamond, oil and base metal projects worldwide, Investors Guru was always on the cusp of the next big thing. As money flows switched into tech, we changed our focus to dot-com stocks, many from their infancy to now household names.
In January 2000 we emailed our members to look closely at a long-term NASDAQ chart. The slope of its ascent was straight up from the end of 1998, from around 1500 to 5000. We believed the dot-com bubble was signalling a major selloff by May, and that most stock markets and the overall economy would go into a prolonged recession. The NASDAQ actually started crashing in March, at a time when most analysts were still trying to outdo each other's price targets, for dot-com stocks with stratospheric P/Es.
Later that year we wrote that our site was closing, as the markets most likely were not going anywhere for at least 4-years, and that it would be higher commodity prices like oil, gold and base metals that would lead the markets out of recession. At that time oil was about $12 a barrel, gold $260 an ounce and copper .80 a pound.
Fast forward four years and the economy and stock markets had changed materially. After 911 interest rates were slashed to historic lows to keep the economy from going further into recession. Cheap money and deregulated debt markets fuelled an artificial housing boom and today's subprime/ABCP crisis. Oil, gold and base metals prices soared as we predicted, but it was a bit of a shocker when the Bush administration was re-elected in 2004. With the US sinking from fiscal surpluses into major deficits and debt, with trade deficits still at $60+ billion per month, we decided to keep the site closed until a majority of Americans finally realized that Republican hillbilly economics had to change.
In January 2000 North American stock markets were approximately: NASDAQ 5,000, DJIA 12,000, S&P500 1,500 and TSX 9,500. Now it's March 2009, so let's see what we missed: NASDAQ 1,400 -72%, DJIA 7,000 -42%, S&P500 700 -53% and TSX 8,000 -16%. US stock markets are down 50% from 2007 highs and many companies have disappeared, both large and small alike. For credibility sake, rather than try and fight a long-term losing dead horse trend, we made our market expectations clear back in Y2K by simply closing down until valuations made sense again.
Our charts tell us that March 9 signalled a major technical bottom, with the DJIA holding the 6,350 levels and bouncing +15% since. Value and risk now appear to be discounted in today's much lower prices, but there remain major cracks in the world's economic foundation. On one hand, government money floodgates have been opened full tilt in the name of all things stimulus. On the other, how will much higher debt, inflation, taxes, and currency devaluation be managed, to prevent the whole house of cards from collapsing?
Nobody knows if history will refer to this time as The Best Buying Opportunity Of Our Lifetime, or The Start Of The Next Great Depression. If you believe the latter, perhaps you should look into gold and silver bullion, or a farm for value. But if you believe the value of paper money and the current economy will survive, you need to read, research and consult with your advisors to put money to work somewhere in the markets.
Richard Heinberg's, The Party's Over - Oil, War and the Fate of Industrial Societies explains how the world is about to change dramatically and forever as a result of oil depletion. We believe the world economy desperately needs an abundant, low cost, environmentally friendly new source of energy. Putting aside the paper money and debt crisis, we believe that markets are undervalued and set to rebound. But for only a few years as we agree with Heinberg's concept of severe, reoccurring, energy led recessions until there is a long-term solution.
Cecil Musgrave, our Editor-in-Chief, wrote You Are Wealthy ... Starting Now! - Free Your Wealthy Mindset, Develop Your Life's Wealth Plan, as a tribute to his father and to show his teenage sons how to build and value real wealth. Wealth philosophy, opinion and life lessons are wrapped around 6 emailed spreadsheets - your life's wealth plan. Update a few blue-cells, mostly from memory, to complete: Your Wealth Now in a Nutshell, Wealth Creation Budget, mortgage Amortization Table, Time & Compounding savings tables, Value Stock Selector and Value Calculators, with the value perspectives of legendary investors Benjamin Graham, Warren Buffett and Peter Lynch. Search 'wealth plan' on Amazon.com or visit www.YouAreWealthyStartingNow.com.
Everyone has winners and losers and we've had many of both. One of the differences between Investors Guru and other sites is that we try and discover early, report thoroughly, update often, and stay with it. Some members' look for potential short-term trades, while others look at the long-term, both long and short. Some follow only active percent/volume gainers, believing the trend is your friend, while others prefer beaten-up contrarian value stocks, to quietly build a position before the street figures it out.
Many financial sites claim they know how to value stocks and pick winners. But when you look behind the site, you often find someone who is barely old enough to open a brokerage account, having little practical experience, and no formal securities training or licensing. Financial websites come and go often, and credibility is important.
Welcome to The New InvestorsGuru.com! Enjoy our vastly improved depth and delivery of quotes, charts, news and various other market data. Become a member for the same insight and commentary as before, and to share your knowledge and opinion on our bulletin boards, polls etc. Personalize your experience by logging-in to update your News by Email and Portfolio preferences. Make us your home page, for an instant snapshot of today's markets as you open your browser. Join our growing small cap stock community again, as we position for the next wave!