Ross Beaty of Pan American Silver joins Real Vision’s Grant Williams to discuss his experience successfully managing businesses through uncertain markets. Beaty explains that diversification, risk management, and critical thinking are the most important parts of helping a business to persevere. This video is excerpted from a piece published on Real Vision on September 21, 2018 entitled “Grant Williams in Conversation with Ross Beaty.” Watch more Real Vision™ videos:
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Ross Beaty on Managing Businesses in Uncertain Markets
Transcript:
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ROSS BEATY: --I can't sell out, right? I've got two outcomes-- either I get bought out, I sell once--
and I've done that many, many times-- but I only do it once. I don't sell along the way. I buy along
the way. But I only sell once.
Or if I'm in a company-- if I'm building a company that's going to be a long-term operating
business, my attitude is I'm going to build that company until I'm no longer needed to be there, in
which case I then either resign or retire or leave it or die, or something like that. And the company
survives my exiting the company, in which case, it's a happy ending. Maybe it just at my death I--
the stock is sold when I croak. I mean, in other words, I don't build these companies to exit along
the way. Either I get bought out or I hold them until the long-term.
The critical thing is we tell shareholders what we're going to do and we follow through. We
execute that plan. The companies that frustrate me are the companies where I invest in them. I
give them a million dollars to do x and they go out and spend it on y.
GRANT WILLIAMS: Right.
ROSS BEATY: That drives me crazy. And I never invest in them again. I don't mind if they take that
million dollars, if they say they're going to go and explore a bunch of holes in this place for this
commodity. And they come up with nothing, that's fine. They execute well, that's exactly what I
made that bet for.
I give them a million dollars. I understand this risk. I understand it may end up with zero. But I also
may end up with $10 million--
GRANT WILLIAMS: Yeah.
ROSS BEATY: --if they get lucky. And I'm prepared to take that risk. And I never whine if it goes to
zero because that's the nature of the business. But if they go and divert it somewhere else, then I
get mad.
GRANT WILLIAMS: So people watching this who invest-- I mean, plenty of people are watching
who do invest in resource stocks. There'll be plenty that maybe will end up investing in them. And
you invest not in companies you run, but you also invest in other companies.
What's kind of your checklist? What do you look for? And what order of importance? And how
do you figure out, OK, this is a company worth my investment?
ROSS BEATY: Well, the first, by far, is who's involved. I look very carefully at who's involved. And
I look at their record and I often meet them in conferences or wherever. And I encourage all
investors to try to do that, especially with the smaller companies to get a measure of the people
who are involved.
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