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John Petersen
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John Petersen is the executive vice president and chief financial officer of ePower Engine Systems, Inc., a Kentucky-based enterprise that has developed, built and demonstrated an engine-dominant diesel-electric hybrid drivetrain for long-haul heavy trucks that promises fuel savings of 30 to 40... More
My company:
Fefer Petersen & Co.
My blog:
ipo-law.com
  • The Blogger's Real Influence 12 comments
    Jun 3, 2012 3:25 AM

    Blogging on investments is a fascinating exercise in human behavior. One of the first things I learned when I started writing about the energy storage sector in the summer of 2008 is that my words almost never have a direct impact on the market prices of companies I write about. After interacting with readers for almost three years, it's clear that a blog like mine can motivate a small percentage of readers to do their homework and invest in a particular company, but most readers will simply sit on the sidelines, monitor developments and eventually make a decision based on corporate accomplishments.

    Those who do the work and make a decision prior to an identifiable corporate accomplishment are bottom feeders of the highest order who are content to put out a low bid and wait for the price to come to them. They'll never chase a price.

    Based on my experience over the last three years, I'm convinced that the following graph of the Technology Adoption Lifecycle is equally applicable to the investment markets. The readers who are intrigued by an article or series of articles and really dig down into the meat of a company are the equivalent of innovators and early adopters - the folks to the left of the chasm. The majority of readers, in contrast, are watching and waiting for a business milestone before they commit. For some it will be a technical milestone, for others it will be a revenue milestone and for others still it will be a profit or market milestone.

    It's a big universe out there and my sphere of influence is very limited.

    I'm always a little fearful at industry conferences when CEO's of companies I write about approach me for the first time. I worry that they'll take issue with something I've written. In most cases, they want me to write about their company more often, not less. Apparently readers quickly forget what I say about a particular company but they remember that I said something, and that keeps the stock on their radar.

    In the end, it reminds me of the old George M. Cohan line, "I don't care what you say about me, as long as you say something and as long as you spell my name [and my stock symbol] right." Someday I may achieve guru status where my words move markets. Until then I'll have to be content with sharing my experience and helping others develop an investment style that suits them.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Comments (12)
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  • bazooooka
    , contributor
    Comments (2759) | Send Message
     
    Getting quiet in here for some reason =). I think this was a great blog and deserves to be a featured article. It does a good job explaining why blog "followers" and "market movers" are different audiences.

     

    When AXPW (and the others you've highlighted) do pop 3x-10x then your record will speak for itself. I do hope you're getting client work from your efforts. And if not you should consult to hedge funds. I hear they pay pretty good.

     

    FYI: I hope to hear you do more "audio" blogs; your interview with the "mad hedgefund trader" and with "Jack Lifton" should be required listening for any energy/battery/storage investor.
    16 Jun 2011, 08:54 PM Reply Like
  • John Petersen
    , contributor
    Comments (30170) | Send Message
     
    Author’s reply » SA's pretty picky when it comes to feature articles. They need to include actionable investment advice. This one doesn't. It's just a topic that I find interesting and wanted to have in writing for commenters and others who want to better understand some of the intricacies.
    16 Jun 2011, 10:43 PM Reply Like
  • La Marque
    , contributor
    Comments (1598) | Send Message
     
    Your point about some event causing a reader to buy a stock is true. In my case, mid 60s, retired, the 'valley of death' that you have pointed out is a real 'chasm' for me to watch out for. Thank you, John.
    17 Jun 2011, 10:34 AM Reply Like
  • John Petersen
    , contributor
    Comments (30170) | Send Message
     
    Author’s reply » Every investment has its own wall of worry and since I'm not far behind you in the age category I've decided that no investment is worth an hour of lost sleep.
    17 Jun 2011, 12:03 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9908) | Send Message
     
    Interesting thesis, John.

     

    I think there is also another type of investor who invests during all five of the phases in your chart. They are the ones who invest in a "corporate story."

     

    I have a pal who bought a bunch of Google a while back. Never a bit of concern he had during the post-Lehman crises, because he loves the Google story. He continues to add when funds become available, regardless of price or market timing.

     

    Others I know love Apple, and have been adding here and there, again regardless of price, because they love the Apple story. These folks either don't have the time to track the market day-to-day, or even if they do, they are resolved to only owning a safe stock, ignoring all the principles and protection that diversification offers.

     

    I would like to see how your market-timing chart would interact with a risk oriented chart. Betting those who prefer less risk, enter a stock with the Late Majority. That's not all a bad thing, because companies like Google and Apple will continue to yield nice returns over time, continuously beating the "field" of the major indexes.

     

    It's not at all a bad investing premise. Not too stressful, and requires little attention.

     

    The higher risk oriented investors are the ones who likely pay a lot of attention to the markets. They are the ones who allocate a percentage of their portfolio to seeking out and finding that developmental stage company with great promise...a great story.

     

    For me, Axion falls into this category, as do a couple of biotechs and microcap oil sands stocks. Some people call this "sock drawer" investing. Buy it, stick the investment away, hold no matter what, and let things play out.

     

    Axion is my largest sock drawer investment.
    17 Jun 2011, 01:14 PM Reply Like
  • John Petersen
    , contributor
    Comments (30170) | Send Message
     
    Author’s reply » Actually I don't try to define the stock market as closely as Mr. Moore subdivided the technology adoption market. The only distinctions in my mind are the early adopters like you who do their homework and invest in anticipation of an event and those that don't. As soon as you get off into the those that don't category you see all styles. Like most of my observations about market behavior this is just another dot on the canvas that helps tie the other dots together in a coherent picture.
    17 Jun 2011, 01:21 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9908) | Send Message
     
    Just as long as it's not Jackson Pollack making those dots!
    17 Jun 2011, 01:50 PM Reply Like
  • John Petersen
    , contributor
    Comments (30170) | Send Message
     
    Author’s reply » Would that I could count on Jackson Pollack class revenues.
    17 Jun 2011, 01:59 PM Reply Like
  • rgholbrook
    , contributor
    Comments (116) | Send Message
     
    Mr. Petersen,
    Thanks for taking the time to share these ideas. There have been some events like the BMW presentation and the railroad battery order, but the big events, i.e. big orders, are still being anticipated. Where would you put investors who invest today in Axion in terms of the chasm?

     

    And, since Jack Lifton was already mentioned, I was wondering if you two had discussed your Inflection Point Investing thesis with him in regards to one of his favorite companies Great Western; or if it can even be applied to a vertical REE mining company? THX.
    18 Jun 2011, 11:16 PM Reply Like
  • John Petersen
    , contributor
    Comments (30170) | Send Message
     
    Author’s reply » To the left.

     

    It's all a question of the way people perceive events. For decades I've dealt with big companies on behalf of small ones and know that they're usually far more protective of their name than they are their money. I had several instances in the early 90s where we were trying to buy oil properties from the majors and they didn't care if we described the properties in detail, but they were almost psychotic about allowing us to mention their names. The standard rule was we could talk about what we were buying with relative impunity, but we couldn't say who we were buying it from until the closing. You see the same thing in the battery industry and A123 apparently has a contract to supply batteries to a US manufacturer that still won't let A123 disclose their name. It's nuts but it's real life.

     

    Coming from that history, I know the important step in the NS relationship was when they hired Axion to build a battery management system and let Axion disclose their identity. That was a big contract from a revenue standpoint and probably involved a few hundred thousand in fees, but it was more critical as a clear public association of a very large company with a very small one. The BMW presentation was even more shocking to me because I've never heard of an automaker standing up beside a small technology developer and effectively saying "this is the only technology that works properly in this application." Even more amazing was the hat tip to Axion that came in the last slide of the Ford-BMW presentation.

     

    In human relationship terms, I look at both business relationships as being in a post-engagement, pre-marriage status. Unless something unexpected happens, the orders will follow in the normal course of affairs, but only when Axion's manufacturing capabilities are up to its partners standards.
    18 Jun 2011, 11:44 PM Reply Like
  • FoxMan
    , contributor
    Comments (38) | Send Message
     
    Good article. I suspect I am to the right on your chart, as I have been following your energy storage commentary for several months now, but have not purchased any equities in the space. But I don't follow Jim Cramer at all, and I don't think you're looking for that kind of market moving power.
    4 Jun 2012, 09:21 AM Reply Like
  • John Petersen
    , contributor
    Comments (30170) | Send Message
     
    Author’s reply » I love the opportunities in the energy storage sector, but know it's one of those areas that takes a long time to understand. The nice thing about my writing style and content is that I don't generally appeal to the hot money types. Instead I seem to appeal to people who take a long time to make their decisions and know why they own every stock in their portfolio. I hope Axion eventually delivers enough to move you from the watcher class to the prospective investor class.
    4 Jun 2012, 09:39 AM Reply Like
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