Dana Point is a beautiful place for a vacation, but I wasn’t there for the beach. It was just one of many due diligence trips I take as I research investment options for my clients. You can learn a great deal about a company if you spend time face to face with the principals. On this particular trip I was investigating a healthcare opportunity.
While listening to a company expert describe their business model I noticed he was drinking from what looked to be a designer water bottle. Soon hotel workers were passing the bottles to all of us and hundreds more were placed on the table at the back of the room. My mind drifted from the speaker to the label where I read, “Taken from a virgin aquifer shielded for centuries under ice and rock in the untouched wilderness of central Norway.” Impressive! This was obviously a very expensive drink of water. I sat my bottle on the table in front of me right next to an ice-cold pitcher of regular Dana Point tap water. I thought for a moment, then poured myself some water from the pitcher. It was great. After all, it was just water. As I left the conference center after the days’ events, I stuck one of the nice bottles in my bag.
When I went back to my room I noticed two identical bottles of that same water sitting on the desk with a price tag on them. They were $25 each! I couldn’t believe it. Norwegian glacier or not I was not paying $25 for water. The next day, based on my research and observations, I left that meeting having decided not to offer their products to my clients. There were several things about the company that I was concerned with and one of them was that expensive little bottle of water. I figured any firm that would pay such a ridiculous price for water just to try and impress a group of financial advisors may not be one I should trust my clients’ money with. I did keep their bottle of water as a souvenir, and it sits on my office shelf to this day.
Call me silly but I would not hire a dentist who had bad teeth, a mechanic who didn’t have a working vehicle, or a landscaper whose own lawn was dead. And I certainly won’t let a firm that wastes $25 on a bottle of water invest my client’s money. Financial statements tell a lot about a company, but there are much smaller things that may tell even more. Ironically, six months after that meeting, the firm that sponsored it filed for bankruptcy. When I read the news I looked up at that $25 bottle of water on my shelf and was thankful I had paid attention to it.
As an interesting footnote, a few months later that Norwegian bottling company was forced to admit they were filling their $25 water bottles, not from a glacier, but from the public taps in Norway. If you would like to stop by my office I will gladly show you the $25 bottle of Norwegian “tap water” that continues to remind me that you can learn a lot about a company if you pay attention to the little things.
Disclosure: Only Contents distributed during the individual’s affiliation with Raymond James have been approved and retained by the Raymond James. Posts made outside of Raymond James affiliation were not made on behalf of and do not promote Raymond James.
Dan Wyson, CFP® is author of “The Gold Egg,” and “21 Financial Myths” and owner of Wyson Financial/Wealth Management 375 E. Riverside Dr. St. George, UT 84790 – 435-986-9525
