My Worst Investment Ever Podcast Neil Johnson – Take the Profit When You Can
BIO: Neil Johnson is a renowned finance expert with over 30 years of experience in investment banking, merchant banking, and research analysis in Canadian and UK capital markets.
STORY: Neil invested in an internet company building website templates when the internet was just starting. The company filed to go public, but the financiers kept delaying the process and never went public. Six months later, the company went to zero. Neil lost his entire investment.
LEARNING: Take the profit when you can. Take some money out and play with the rest. Do your due diligence.
“Try not to be overly greedy. There’s something about leaving a little on the table for someone else.”
Neil Johnson
Guest profile
Neil Johnson is a renowned finance expert with over 30 years of experience in investment banking, merchant banking, and research analysis in both Canadian and UK capital markets.
He currently serves as the Executive Director and Chief Executive Officer of Duke Royalty. He is responsible for leading deal origination, due diligence, and structuring for Duke, a $300 million alternative finance investment company listed on the London Stock Exchange.
Neil’s expertise as CEO of Duke Royalty and in his prior role as European Head of Investment Banking at Canaccord Genuity is invaluable for business owners of private companies and investors in public companies.
He has played an instrumental role in the growth and success of companies, raising over $5 billion in funding for hundreds of companies during his 19-year tenure.
Worst investment ever
During the run-up to the.com one era, when the internet was starting, Neil was a young internet analyst with some exposure to some of the high-flying stocks of the day. He learned of a company that was creating website templates. The company was looking for investors, and Neil thought it was a good investment, so he invested his savings. Neil also charged the company an investment banking fee that he was taking in stock.
Though the business had a good product, it was too early into the market, so no one paid attention. Neil was getting in at 50 cents a share. A few years later, the internet bubble enveloped the company. The founders got a call from one of the biggest internet financiers in Silicon Valley and got signed up to go public.
They did a pre-public round, so they wanted to buy all the shares they could get. They tried to get Neil to sell his shares to them at $5 a share, which was ten times more than he paid for his shares. He, however, wasn’t interested in selling his shares as he believed the company would grow and the shares would be worth a lot more.
The company filed to go public in March 2000, and now the shares were selling at $15. They kept delaying the process and never went public. They had ballooned the management team and company costs. The company had about $25 million on the balance sheet, but management blew through all of it. Six months later, the company went to zero. Neil lost his entire investment.
Lessons learned
- Take the profit when you can.
- Take some money out and play with the rest.
- Do your due diligence.
Andrew’s takeaways
- You’ve got to have a lot of bets lined up so that one decision doesn’t wipe you out.
Actionable advice
Don’t be overly greedy. There’s something about leaving a little on the table for someone else.
Neil’s recommendations
Neil recommends investing in Duke Royalty because cash flow is king.
No.1 goal for the next 12 months
Neil’s number one goal for the next 12 months is to continue investing in good companies, get that cash flow out to his investors in dividends, and look for new opportunities.
Parting words
“Stay safe out there. Investing is never 100%; you just have to win more than you lose.”
Neil Johnson
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Connect with Neil Johnson
Andrew’s books
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
Andrew’s online programs
- Valuation Master Class
- The Become a Better Investor Community
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- FVMR Investing: Quantamental Investing Across the World
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points
- Achieve Your Goals