Marcus New, founder of InvestX Capital, says his portfolio is very eclectic, due to areas where he feels he has strength.Jeff Vinnick for the Globe and Mail
Marcus New started making serious money as a teenager while attending Trinity Western University in Langley, B.C.
At age 18, he bought a student painting franchise and was raking in more bucks over the summer than some of his peers were making the whole year in their entry-level jobs. After spending a couple of years working in investment marketing roles after graduation, Mr. New founded financial data platform Stockgroup Media Inc. in 1995. He sold that business in 2010 and soon after invested in and became chief executive officer of online financial company Stockhouse Publishing Ltd.
Last year, Mr. New stepped down and took the chairman role so he could start InvestX Capital Ltd., a platform that connects private equity and venture capital deals with accredited retail investors. The Globe recently spoke with Mr. New about why he favours small capitalization public companies and large cap private companies in his portfolio.
What was your first experience in investing?
I always loved the stock market. When I was 18 and made a bunch of money [through the student painting company], I invested in small mining and technology stocks on the Vancouver Stock Exchange by following the advice in Tom Kinakin's The Profit Letter. I made some money, and after that I was hooked.
What's your current investment philosophy?
Stick to what you know so that you can be better at it and create better returns for yourself. If you want to be in another asset class, find someone who is really good at it. You can learn from their advice, but you have to pay to learn.
Do you self-invest or have someone do it for you?
I do both. I think most investors need both. You need people that can watch your money and be informed and that's their core business, and then invest yourself around what you know.
What's in your portfolio today?
I have stuck generally to equities. I've created wealth in two ways: owning investments in my own companies as an entrepreneur and through the public equity markets. My portfolio is very eclectic, due to areas where I feel I have strength. Most of my stocks are small caps. That's in part because I've built a network of information in that marketplace through Stockgroup Media and later Stockhouse, as well as deeper knowledge and relationships into that ecosystem. I also invest about 15 per cent of my portfolio in large cap private companies through InvestX. These are billion-dollar companies that I'm catching in the last private-round stage, before they go public. That is a powerful profit zone.
What is your investment criteria?
For private companies, my criteria are that there has to be institutional investors in it. It's not that there aren't great private companies that don't have it, but then I know someone has been involved in setting the price, doing due diligence and going through the selection process. I get to ride off of that wave a bit. For the small public stocks, I look for trends and I don't try to pick a bottom. I would rather miss the first 20 per cent move up than have money sitting idle for a long period of time.
What has been your worst investing move to date?
Short-term trading. I can't seem to make money at it. Also, investing in companies that didn't have enough cash. When they get caught in a bear market, they can't raise capital and your investment goes lower. The lesson I learned there is to really pay attention to the balance sheet.
What about the best move?
Trying to create some expertise in an area and being patient with it. For me, over the years, it has been around a couple of really big themes in the industry and having the courage to get into them before a lot of other people do.