My Worst Investment Ever Podcast Peter Goldstein – Check Your Emotions at the Door
BIO: Peter Goldstein is a seasoned entrepreneur, capital markets expert, and investor with over 35 years of diverse international business experience.
STORY: He and four others put a significant amount of money into opening up this facility in Long Beach, California, where cannabis was in great demand just when it was being legalized for recreational purposes. At the time, there were no clear regulations, making compliance with the ever-changing rules costly to the point where the business was not making any profits.
LEARNING: Check your emotions at the door. Be cautious before you jump on a trend. Analyze and understand your risk. Get expert help if you don’t understand your investment.
“Check your emotions at the door. Ego and greed don’t have interplay when making a sound investment.”
Peter Goldstein
Guest profile
Peter Goldstein is a seasoned entrepreneur, capital markets expert, and investor with over 35 years of diverse international business experience. Throughout his career, he’s held pivotal roles, including CEO, chairman, investment banker, founder, board member, investor, and advisor to public, private, and emerging growth companies.
He founded Exchange Listing, LLC, dedicated to facilitating growth companies’ listings on esteemed exchanges like NASDAQ and the NYSE.
He also founded Emmis Capital, a specialized boutique fund investing in global small and microcap pre-IPO growth companies.
Worst investment ever
Peter was living in California when cannabis was being legalized for recreational purposes. He and four others put a significant amount of money into opening up this facility in Long Beach, California, where cannabis was in great demand. They went through all of the necessities to get the license to comply and build the facility, not realizing the complexities and challenges that would result in the worst investment Peter has ever made.
A few factors made Peter want to invest in a licensed facility that was going to manufacture and distribute recreational and medical cannabis products in the largest state in the US with the most history in the cannabis sector. One, there was a crowd and a popular trend for cannabis. Two, an emotional component of greed made him believe he could make an exponential return on his investment. Unfortunately, Peter didn’t think about the risk component, nor did he think about getting expert advice to guide him through understanding the industry and how to manage risk.
Another thing that affected their business was that they were one of the first movers. And so, as they were learning, so were the regulators, and every time they learned something new or something changed, the business owners had to react to that. Also, there was not yet a proven market. There was a grey market, and there was certainly a black market. But there wasn’t a compliant market where it was understood what the accurate margins would be. Of course, there was significant demand. But after deducting all of the production costs, regulatory taxes, and distribution, the margins were slim to none.
Lessons learned
- Check your emotions at the door. Ego and greed don’t have an interplay when making a sound investment.
- Be cautious before you jump on a trend. Don’t follow the crowd mindlessly just because everyone’s going in that direction.
- Analyze and understand your risk.
- Get expert help if you don’t understand your investment.
- Don’t believe your own thoughts about how unique your product or service is. Pressure tests ensure that what you think is received by the market is true.
Andrew’s takeaways
- If you’re starting a business, know that you and your business will be a commodity. The only way to get out of that is by thinking about strategy, positioning, how you will enter this industry, what will be different about you, and having the discipline to follow that strategy.
Actionable advice
Don’t believe the hype.
Peter’s recommendation
Peter recommends his new book, The Entrepreneur’s IPO: The Insider’s Roadmap to Taking Your Company Public, for any entrepreneur wanting to understand the IPO process. There are 12 chapters in the book. Each chapter features two industry professionals from NASDAQ, the New York Stock Exchange, the London Stock Exchange, etc., giving practical advice to fill a knowledge gap for entrepreneurs considering taking their companies public.
No.1 goal for the next 12 months
Peter’s number one goal for the next 12 months is to build a global community of entrepreneurs who want to learn and understand investing in micro and small-cap companies.
Parting words
“It’s been a pleasure. Good luck, everyone. Stay smart and stay safe.”
Peter Goldstein
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Connect with Peter Goldstein
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