Let’s first take the pulse of the markets this inaugural week past of December 2007. It appeared to us that fundamental investors were most active December 4th, while trading lightened considerably by the 7th and carried the telltale signs of massive risk-management and hedging. IR folks, this means real investors finally followed traders into the maw – we’ve not seen much of that in the past couple months – prompting everybody else to take out insurance on their equity positions. No fund manager wishes to be caught shirtless on a Friday nowadays.

Now let’s get back to investor relations: this is a field that takes a great deal of time and effort to understand. It’s not a weekend project. If you want to grasp why equities do what they do, it helps to consider the immediate and far-off implications of actions and situations. The whole investor relations field needs to adapt to another way of thinking. Only when IR starts to consider the here and now can it really begin to figure out answers to bigger questions related to how or why stocks act the way they do.

If you doggedly persist in conducting your IR program altruistically, supposing that investors will simply follow your long-term business reasoning…well, as we’ve suggested before, go private. Because today’s public equity markets are no place for you.

Markets are unforgiving, tough places: you can’t assume your investors are looking to study and buy into your strategies for the distant future. That won’t get you too far in today’s markets… except, maybe, out of a public listing because you don’t fit in.

If, however, you’re willing to adapt and take some measure of interest in the juvenile hyperactivity (no offense anyone, I'm tying up the analogy) that seems to punctuate both contemporary societal and capital behavior, we think you’ll enjoy your job a whole lot more and feel better about happenings in the short-term to boot – which is great for sleeping well at night (and if you do, so will your CEO or CFO).

Tim Quast is a fifteen-year Investor Relations veteran and founder of ModernIR. Sign up for our weekly newsletter - Market Structure Map. Learn more about Equity Analysis and trading inteligence. For more information, please visit: What is market structure?

This entry was posted on Wednesday, March 17th, 2010 at 10:45 am and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.