AGM season

It's AGM time again. If I can afford time to attend only ONE AGM it has to be that of Challenger Technologies. This is one of my favourite stocks which has given reasonably good total return over the years. You never ever feel it is a waste of time attending its AGM. For 4 years now when I have been there the same small crowd of faces will be there, maximum about 30 shareholders. It is held at their building in a theatrette where the CEO, CFO and CO Sec sat on a slightly raised platform and the directors sat on the front rows amongst the shareholders. This is so very different from the ballroom setting of blue chip companies' AGM where the top management and directors sit on the stage where they literally talk down at shareholders giving motherhood statements, crackling a joke or two to avoid troublesome questions and occasionally losing patience at long winded trivial ones. At these AGMs you are put in your proper place, ie. a minor shareholder. These large companies usually have separate briefings for analysts.

At Challenger's AGM the same handful of about 5 to 6 investors will not fail to ask insightful questions, which showed that they not only have read the annual report inside out but have also been following the company's development on the sideline. You see this company is never covered by analyst and the stock is tightly held with very low volume traded in the market. Investors hence have to stay alert ie. pay attention and observe its business environment. So very detailed questions relating to sector margins, subsidiary profitability, opening of new outlet rationale, expansion risk, challenges faced, cashflow management etc were raised. The CEO comes across as a very frank, practical and sincere guy who does not smooth talk. At one stage, he exclaimed in Singlish "Wah, so many questions!" Indeed this is one AGM where I can also gather some insight on the toughness in running a medium sized business in Singapore. The CEO spoke about the difficulty of labour shortage and how they overcome by employing retirees who amazingly have extremely good work attitude. He also shared about the challenges of high rental in shopping malls and difficulty in getting a foothold in some. Apparently they waited 5 years to squeeze into Tampines Mall and how there is little room to negotiate for more space than allotted, not to mention the rental.When I heard that, my investor mind straight away thought that REITs must then still be reasonably good investments. Haha capital does not have loyalty and sentimentality.

As it is a small group at the reception, I felt comfortable enough to approach those few investors who from their questions showed that they have followed the business closely, to get their opinion whether they intend to buy more, hold or sell the share. I am a bit surprised that these guys ( two of them in their 30s) seemed  to frown upon my question whether the price of the stock is peakish (stretched in valuation) and the right time to sell. They like the CEO and have faith in him. One of them even said that we should attend the AGM annually just to cheer the CEO on and give him the moral support. Wow such loyalty to a stock ? Or could it be something more, perhaps it is an attachment to something like a toyshop, since Challenger can provide a variety of cool gadgets and geek toys. Is that why women are better investors than men?