How Next Investors Started
Damian Hajda here, original founder and director of Next Investors.
I have been investing in ASX small cap stocks since I was 17 - back then I had no idea what I was doing, often blowing my entire savings from my pizza delivery job on terrible small cap exploration stocks, getting burned on T+2 trades on Commsec and racking up credit card debts to pay them down.
As I learned these expensive lessons and what NOT to do I gradually improved at small cap investing and wanted to share what I had learned with new investors.
I started my own blog to share my research, investments and the expensive lessons I had learned in small cap investing. I also wrote this ebook to help new small cap investors not make all the same mistakes as I had made.
I shared my research about the stocks I was personally invested in on my blog (then called nextoilrush.com) and I got lucky when my “Top Pick of the Decade” Africa Oil Corp increased by 1,200% in 2012.
I had my entire (modest) life savings invested in that stock - after the price surge I had made enough money to quit my day job in engineering and work on small cap investing and my blog full time.
Fast, easy, money? Nope - this big win happened 10 years after I first started investing in small cap stocks and learned how to maximise my chances of a successful outcome.
My blog became Next Investors, and the parent company I formed was called StockDigital (S3 Consortium pty ltd). Our readers made money from my stock picks so the readership grew through word of mouth.
The business grew but we made some wrong moves...
After a few years of successful investing and growing our reader base, interest in our services to raise awareness for small cap companies grew quickly, so we made the decision to expand the number of companies we covered and grow internationally.
In 2016, we appointed a new management team and professional CEO with a web agency background, built a sales team, opened a London office and changed the StocksDigital business model to cover a wide number of companies for a fee and developed the amplicat publisher network tech.
I went to work on my other start-ups Socialsuite and Raisebook for a couple of years whilst the StocksDigital business operated under the new CEO and management team using a similar business model to all the other small cap stock news sites out there where we would cover any company who paid a coverage fee.
This new model of covering hundreds of companies was not well received by our readers and in hindsight was a mistake by us. We found that our readers preferred when Next Investors only covered a handful stocks that we were personally invested in and truly believed in.
It was time to switch back to the original model...
The Founding Team Returns
In 2018, the original founding team (myself and Jason Price) took back control of day to day operations at StocksDigital and Next Investors. We re-introduced our original portfolio model of only investing in a small number of high conviction ASX small caps with the aim to rebuild reader trust by delivering a positive experience.
We stopped covering just any old company that would pay a marketing fee and started covering stocks that we invested in ourselves. In July 2019 we transitioned the business to a managed fund, and now we exclusively cover stocks that have passed our rigorous due diligence process and we are invested in.
Next Investors Today
We have had great success with our first three Portfolio investments, WHK (Up 300%), EXR (Up 1054%) and our portfolio super star VUL (Up 3660%).
Carefully choosing companies to invest in is the most important part of our model. Combining good companies with wide investor awareness makes for good long term results assuming the company delivers on its plan (this is the risky part we can’t control).
When we make any investment we look out for:
- Great management with integrity and a successful track record
- Top class projects vetted by our trusted industry experts
- Undervalued companies that have been unfairly priced by the market
- The right capital structure for sustainable share-price growth
- Best in class Environment, Sustainability and Governance (ESG)
Once we have decided to invest in a company, we also request that they sign a mandate with us for investor awareness services to help them reach new investor audiences and bring attention to their company's announcements. We take this fee in escrowed stock and why all of our emails have a conflict of interest notice.
This is an exclusive service that we only offer to companies that we are invested in and have passed our rigorous due diligence process.
Our other brands:
Due to the success of the Next Investors portfolio, we have created two portfolios for readers to follow. Catalyst Hunter, the early stage, high-risk high-reward portfolio, and Wise-Owl our long term growth portfolio:
Myself and Jason make the final investment decision on each company and spend most of our time analysing new investments or writing our commentary across our portfolio companies.
Next Investors / StocksDigital is based in Melbourne. We are a small team of eight and you can find our bios here.
I am proud to say that we have turned the company around over the last few years and after a few hard lessons are back to selecting and investing in winning companies, delivering some great results for our readers.