Investors are often told to look for companies with good management — but what exactly makes a leader successful?
Investors are often told that one of the keys to identifying good companies is to look at management — the thinking is that people who have been successful more than once are likely to be successful again.
But what combination of traits makes a person successful? That’s a tricky question, but at the recent International Metal Writers Conference Rick Rule of Sprott US Holdings did his best to answer it.
In his half-hour talk, Rule listed six traits he believes most “serially successful” leaders share, and explained why he believes it’s so important to follow these people. “There’s a wonderful positive feedback loop when people are successful,” he said. “They attract better people around them.”
Read on for a brief overview of the qualities Rule identified. And stay tuned for our video interviews with Rule and other speakers at the show.
1. Pathological curiosity
“I’m not sure why this makes them successful,” said Rule. “I think [it’s] because they are unwilling to accept precedent.” He explained that a serially successful person might approach a problem from several different points of view, and noted that the industry’s most successful people often take on projects that have been approached unsuccessfully by others.
2. The ability to focus and work hard
The serially successful are also “really, really hardworking and focused.” Rule gave the example of Robert Friedland — “when Robert Friedland is on his boat in the Mediterranean … Robert is on two different cellphones talking to people who might give him money. He’s always, always, always working.”
Rule also commented that people who are serially successful are “very smart.” That said, he noted that being smart is less of a determining factor in success than the others qualities he has identified. Elaborating, he said, “I’ve done business with some very smart people who’ve never met with success.”
4. Amazing tenacity
The most successful people in the mining industry are “amazingly tenacious,” according to Rule — and they have to be in order to weather bear markets. Rule noted that during the time he held them, all of Ross Beaty’s successful companies saw their share prices drop by 50 percent at least twice.
5. The desire to look out for others
Interestingly, said Rule, serially successful people are often extremely nice. “They in my experience are genuinely happy about the fact that they’ve delivered value for their employees and delivered value for their shareholders,” he said, adding that these people don’t make it “all about them.”
6. A long-term outlook
Finally, Rule emphasized that the people who tend to see the most success “buy once and they sell once. They don’t trade their own stock, they’re not in the paper business.” Expanding, he said that these people all use the capital markets to build companies — they’re not interested in using their companies to create opportunities to trade in the capital markets.
Rule’s talk was peppered with the names of older serially successful people in the mining business, but in closing he challenged the audience to go out and search for the next generation of serially successful leaders. He named Amir Adnani, currently of Uranium Energy (NYSEMKT:UEC) and GoldMining (TSXV:GOLD), and Ivan Bebek of Auryn Resources (TSX:AUG) as examples, but urged investors to do their own research.
“The most important thing you can do is to have the discipline to invest with the serially successful,” he concluded.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
International Metal Writers Conference 2017, Day 1: Notes from the Floor
International Metal Writers Conference 2017, Day 2: Notes from the Floor