Interview with Steven Rudofsky, Founder of Talex Commodities

You learn about investing by making mistakes. And hopefully you end up making less and less mistakes and more good decisions. We talk with family office investor Rudofsky who shares his learnings, so that maybe we can avoid some of the pitfalls. This is good ammo for retail investors who aren't necessarily full-time profession investors.

This was filmed at the beginning of February before the market reset of late February, and the recent coronavirus outbreak, but the fundamentals of investing are discussed. Things which have been true and will continue to be good investment insight going forward.

We have an enjoyable look back at Rudofsky's client-focussed background and experience in the world of investment. This includes a look at his individual investment strategies to build strong networks and relationships with investors across the globe. Times have obviously changed, but there are pearls of advice that will remain eternally valid, and investors should pay attention. The indictment of international commodities trader, Marc Rich, by Rudy Giuliani is an area of particular interest.

Rudofsky's shares his experience with tricky jurisdictions. In this instance, it was Russia. He talks us through the importance of jurisdiction for retail investors, in addition to advice on due diligence. Investors should approach decisions from a calculated, methodical standpoint, and should maintain neutrality rather than succumbing to emotion. Rudofsky also explores the importance of due diligence: if retail investors don't do their homework, they are asking for trouble. How does the risk outlined from an investor's due diligence weigh up against the potential return profile?

Rudofsky lays down a really useful blueprint of investment criteria for retail investors to follow. It starts with a crucial question: is mining right for you? Mining is high-risk, high-reward, and requires a significant degree of specific knowledge before becoming embroiled in its complexities. However, it is a field that has been well documented for generations, and there is plenty of material for investors to educate themselves with if they wish. While Rudofsky is aware that the current market conditions mean the odds are stacked against retail investors, a small amount of disposable income can still provide exciting returns, provided said income is not massively important to an individual's financial health. ETFs and similar risk mitigating systems provide opportunities to indulge in mining investment with less overall risk.

The blueprint continues with specific parameters: Business Model, Asset, Management, Corporate Structure, Promotion etc. Rudofsky provides some of the educational resources retail investors need to be aware of to stay ahead of the curve. While the odds are stacked against them, there is some information out there that can help level the playing field a little. Rudofsky is honest in that performing due diligence on a company is expensive, but the reality is that the cost of appropriate high-level diligence renders it inaccessible to most retail investors.

Rudofsky covers management behavioral red flags: generally, management teams who don't put their money where their mouths are. This includes those who are overpaid and buy an small or negligible amounts of shares. Investors want to see skin in the game. If a management team doesn't have their necks on the line, where is the incentive to make the company perform? Management must be truly aligned with its shareholders.

Talex Commodities Capital is a 'boutique' merchant bank working exclusively in the natural resource sectors, with a focus on mining and oil & gas. The principals in the business, Steven Rudofsky and Eric Kolodner, together have over 50 years’ complementary experience across a wide range of assets, transactions and jurisdictions.

Company page: http://www.talexcommodities.com/

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