The CEO and Editor of WallStreetCorner.com, Inc. talks with the Opportunist’s Managing Editor Leslie Stone about emerging growth companies, his take on the U.S. economy and which presidential candidate he’d like to see occupying the White House.
It’s not every day that someone writes a prospectus—quite possibly the most important piece of the pre-IPO puzzle—that merits a perfect score from the Securities and Exchange Commission. Even more unusual is for a prospectus with no legal jargon whatsoever to receive the SEC’s nod of approval. Earlier in his career, Larry Oakley wrote and submitted a prospectus for a small private electronics manufacturer where he had recently been named president. The SEC not only made the document effective with zero comments but also wrote Oakley a letter requesting 1,000 extra copies to give out as a perfect example for other companies who wanted to go public. “The SEC wanted to show other people they could go public themselves without going through a brokerage house,” says Oakley, who today is often referred to as the “Elder Statesman of Emerging Growth Investment Writers.”
Over the past quarter-century, Oakley has gained notoriety covering small-cap stocks and emerging growth companies. He has also been a frequent speaker at international economic, banking, investment, and computer conferences, contributed financial articles to publications including The Robb Report, Speculators Magazine, Personal Investing News and Inside Wall Street, among others, and has appeared as a guest on numerous investment talk-radio shows and TV shows such as “Good Morning America.” He has also written two books on Swiss banking.
Opportunist: Why do you think your prospectus made such an impact on the SEC?
Oakley: I went to New York and talked with the big banks about going public. They wanted to put up the money but I said ‘Let me get back to you on that.’ So I walked around the block to the SEC and met with one of the fellows there and told him I wanted to go public and wouldn’t mind doing it myself. ‘Glory be,’ he says, ‘follow me,’ so I followed him down the hall to a room where he turned on the light and there, on the walls, were shelves filled with hundreds of prospectuses. He advised me to read through some of them, take notes, then go home and write my own and bring it to show to him. So I worked on it and brought it back in and he said it was pretty good. He made a few suggestions, which I followed, and believe it or not, mine was the first one in many years made effective with no comments.
Opportunist: What happened with that company?
Oakley: The stock went up and we finally sold the company a few years later and I retired—for the first time. About a year later I got tired of retirement and went to see a local real estate company in New Jersey. They asked if I would mind taking a test they administered to every person who wanted to join the company. I agreed, and when they called me back to chat they said they’d love to have me on board because I had the highest IQ they’d ever seen on any test since they’d been in business. [Laughs]
Opportunist: That’s right, you have been a Mensa member. Did you join the company?
Oakley: Yes, and I worked in real estate a little bit before getting an opportunity to head marketing for a new electronics company near Princeton University. That business was taken over by a California company and I was invited to come work for them as their marketing manager. They were soon taken over by a Fortune 500 company and I stayed as the subsidiary’s market manager. One of my duties involved going into plants in various countries and reporting back what other people were doing. I was able to walk through a facility and reproduce the details of what they were doing. Around that time I also started my worldwide lecture tour. For a few years I went to various banking and investment conferences and was the keynote speaker in 63 of them.
Opportunist: You have traveled the globe with your work. What are some of your favorite destinations?
Oakley: For many years as my wife and I traveled about a week out of every month, our favorite countries were Italy. Germany, Switzerland, and Great Britain. We have friends who live in Zurich and each time we’ve gone there we have met with them.
Opportunist: What is your formula for a successful lecture?
Oakley: I never have any paper with anything written on it. I just got up and told everyone to stand and stretch. Then I asked them to sit down and said that after sharing with them, I’d have them give me any questions regarding any investment matter for the rest of the lecture period. I specialized in Gold for a year or two, and gradually included technically based emerging growth companies. It worked out pretty well because everyone liked the idea of having an extemporaneous speaker as opposed to a guy who reads his notes.
Opportunist: Why do you focus your research on emerging growth companies?
Oakley: Emerging growth companies are responsible for most of the innovation in this country, and I like to write about companies that have been very good at innovating new things. If you write about them early on their share price increases much more, percentage wise, than companies on the Dow or the NYSE. I enjoy talking with CEOs but sometimes they get very technical and really don’t know very much about running a business. Once in a while you find someone with technical knowledge who is also doing the right thing for the business. Several CEOs have called me after I write about their company, and have commented: ‘Larry, you’re the only person we’ve met who understands what we really do,’ and `Larry, you’re the only person who has ever put what we do into words that can be understood by our technically untrained shareholders and shareholder prospects.’
Opportunist: Which of your skills do you credit for that?
Oakley: With degrees in engineering and accounting, as well as having had lots of other courses and experience, I am able to talk their language, whatever it may be. When you’ve been around the block, you can talk intelligently about more things than people who haven’t. [Laughs] I find that I am able to learn what they do and explain it to others, which I really enjoy.
Opportunist: Tell us about WallStreetCorner.com.
Oakley: My wife and I have been producing it for the last 26 years. We are one of the oldest dot com companies, are still in business, and have never borrowed a penny from anyone.
Companies find it very difficult to hire someone, pay them only $1,000 a month to write about them and send out emails. I have an email database from 96 countries and they’ve all opted in independently in the last 20 some years. One of the things I do for a client besides research reports is send out email alerts. I use Constant Contact to keep me doing things correctly and I send out an average of one or two a month.
About 15 years ago I got a call from an IR guy who asked if I would be willing to do an email distribution for one of his companies. I said no, but he came up with a price I couldn’t turn down and I agreed. A few weeks later he called and said, ‘Larry you won’t believe what happened. When we do a news release for a client we get a modest return—perhaps a slightly elevated trading volume or the price going up a little—and that is fine. When you do an editorial and we follow up with a news release about the editorial, we get two to three times the result. This time we did those things and you made one of your email distributions for us—we got 20 times the result.’ Do we always? No, of course not; however, the proof of the pudding is that his IR company continued using our email distributions for a great many months, and they wouldn’t have done that if it didn’t work.
If I write about a small company early on, sometimes the percentage increase in share price is amazing. That certainly offers more potential for gains. That’s why I enjoy working with small companies that have a good product and steady operation.
Opportunist: How do you determine if a company is worthy of coverage?
Oakley: Sometimes I work with individuals who suggest companies who have approached them for help. Before I agree to take on a new client, I will interview the CEO or the CFO or the chairman or the president. When I get on the phone with them I introduce myself and then say, ‘Picture yourself in your living room and you just got a call from an old friend you haven’t seen in 15 years. He’s in town and you invite him to come over. He does, and asks about your company. You tell him three or four things, after which he excuses himself, rushes to a phone, calls his broker, and places an order for your stock. What did you tell him that made him do that?’
This gives me an opportunity to find out exactly what real investment goodness there is in what the company does. I make notes, and then when I write about the company, I look at the notes and make sure I have incorporated all the things that were said during the interview.
Opportunist: What investment opportunities are you excited about right now?
Oakley: Silver and gold, but I believe silver is even better at the moment. I have always been interested in gold and gold mining companies because in the Great Depression that we had earlier in my life the people who had invested in gold mining companies made a lot of money and most of the people who invested in other things lost a lot of money.
There is a company I know about and have been very friendly with for a few years that has a technology that permits people to measure invisible cracks under the surface and growing in the metal parts of a bridge. There are 100,000 bridges that are going to fail like the one in Minneapolis. If they had used his technology they could have prevented that failure because they would know about the crack and when it would fail, so they would know what to do ahead of time and avoid a catastrophic failure. That’s a company I’m helping to get funded and that’s the type company that I like to write about once they become public.
Opportunist: Do you have any advice for investors?
Oakley: Yes. First, in the present economic climate, make sure you have a lot of cash. No. 2, put some of your cash into silver—especially the bags of silver coins minted prior to 1965 that you can buy. Silver content is very high in the dimes and quarters and half dollars of that era. No. 3, do some homework on your own, especially on emerging growth companies. And No. 4, always call the company before you invest—ask questions!
Opportunist: Are you a proponent of the euro?
Oakley: I don’t care for the euro or what is happening in Europe. They got themselves into this mess the same way we did—by borrowing too much money—but unfortunately, they are mostly socialistic, which has proven not to work. I believe that Italy, Spain, and of course Germany and some of the others should return to their original currency.
Opportunist: What are your thoughts on the U.S. economy?
Oakley: I’d encourage the new president and Congress to do away with so much involvement from the federal government and eliminate 99.9 percent of the laws and regulations that apply to small businesses that keeps them from investing to build their capital base of equipment. That will likely keep them from becoming discouraged and taking manufacturing out of this country. We have so many useless regulations that do more harm than good.
I would greatly encourage the government to return to the gold standard. It would take some time, but it would be a good thing to do. If we could achieve that, we would eventually become as healthy as Switzerland.
My wife and I would like to see the United States stop being the main support of the United Nations; we would like to encourage Congress to get rid of the Federal Reserve, and to have them strictly adhere to everything in the constitution. We’d also like to see everything, with the exception of the military and a few other entities, turned over to the states. A good example of state government is Texas. Perry did a good job there.
I noticed Romney indicated the states should be given the opportunity to run almost everything that is not indicated to be federal responsibility by the constitution. I have all kinds of ideas on how the structure of the economy should be handled and the candidate who is the closest to thinking the way I think is Romney. If Romney gets elected I think he will pretty much act like Washington, Adams, Franklin and others from back then. As you can probably tell, I am a conservative.
Opportunist: Do you have any other plans regarding your writing efforts?
Oakley: Yes – In addition to WallStreetCorner, I am working with a service to develop an additional website in which I will write about my selection of special companies that have exceptional potential. It will be Oakleyresearchreports.com.
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Leslie Stone is an award-winning writer/editor with more than two decades of experience covering business, finance and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides in the Orlando area.