Dragons offer advice on how to invest your money
Venture Communications CEO Arlene Dickinson says investing mistakes are great learning experiences.
Boston Pizza founder and former Mountie Jim Treliving is in Palm Springs, far from the snow and winter, relaxing after a round in the batting cage, and recalling his first ever venture as an investor. “It was one of the gold plays, when I was living in the Okanagan,” recalls the CEO, who became a small screen star over the last two seasons of CBC’s reality entrepreneur show Dragon’s Den.
“I invested $2,500, and that was a big deal for me. My first Boston Pizza had opened up there, and a couple of doctors had put together a fund, and it was a private placement, and it did really well. It took a couple of years, but I ended up tripling my money on that thing. And then I had the bug — you should never win on the first one, ‘cause that’s when you really get the bug.”
Fellow Dragon Arlene Dickinson, CEO of Calgary marketing firm Venture Communications, recalls using some money from her savings account and taking the advice of a friend in the IT business to invest in IBM stock, years before she joined Venture. It was a safe stock, but still a risk, as she knows now.
“The fact is that the market is very sophisticated, and that there are people, from day traders on up to institutional investors, that are using equipment and staff and research that is far beyond the individual investor, so taking your friend’s advice is never a good idea.”
Like anyone who’s played the market seriously, Dickinson says she’s made mistakes, but says it’s important to see them as a learning experience. “The definition of insanity is doing the same things over and over again and expecting different results. When you make a mistake you have to make sure you understand the mistake, and you have to be more diligent in the next investment you make.”
Most people see investing as a gamble, though Treliving says there are some major differences between playing the market and hitting the tables in Vegas. “In Vegas you can see what’s going on instantly. With an investment like this, you don’t see it instantly — you see it maybe six months, a year down the road. I think the greatest thing is that it’s not a gamble the same as in Vegas. It’s the same type of result you could have in Vegas, but I think your odds of winning in the market are much better than in Vegas by a far stretch, and I’ve done both.”
For both Dragons, however, the key to investing is not to get too greedy and to know when to get out. “A guy told me a long time ago that if you make a 30 or 40 per cent return, that’s huge,” says Treliving. “Anything above 20 was his goal, and he made millions of dollars over the years. If you’re making a profit, get out while the getting is good.”
“Set yourself a goal in terms of the profit that you want to make and sell when it reaches that,” Dickinson counsels. “You have to understand that other people have to make a profit and that making any profit is better than any loss.”