COMMENT
Free Lunches That Make You Money

By Ed Bowsher (TMFArkle)
December 15, 2005

If you're a small investor in a company, there is one day in the company's calendar which should be set aside for you. That's the day of the Annual General Meeting (AGM). I've been to plenty of AGMs in my time, and I think they can be very useful.

The best thing about attending an AGM is that you can often chat to the directors. Some AGMs -- especially for smaller companies -- are poorly attended. Sometimes, only three or four private investors show up. When that happens, I'm delighted. That's because I know I'll be able to nab some of the directors afterwards and have a good chat.

And directors are human just like the rest of us. If they're running a small company, they're flattered that someone has made the effort to come to their meeting. After a few minutes' chat, you may have the director's business card, and when you ring him a few weeks later, he'll probably take your call. That's what's I've found anyway.

I should stress that the above scenario only applies to smaller companies. You'd be very lucky if you managed to ambush Arun Sarin, CEO of Vodafone (LSE: VOD), for a chat at the AGM. And he wouldn't return your call a few weeks later.

But FTSE-100 AGMs are still worth attending. You may be treated to a slideshow on the company's strategy, and it's also interesting to see how the directors react to any difficult questions from the floor.

And whatever the size of the company, there's always the prospect of a free coffee and biscuit. Or if you're lucky, you may get a full lunch! Car technology company, Transense Technologies (LSE: TRT), scores particularly well in the food department.

Transense also gets brownie points for holding its AGM at its own offices in Oxfordshire. Some companies hold their meetings at anonymous venues in London. That may be more convenient for some, but a meeting at company HQ is much more useful.

Then you can see whether your company is spending too much money on glitzy offices. And have a look in the company car park. Are there lots of BMWs? You're also more likely to get decent product demos at a company's home.

AGMs can even be social occasions. A large gang of Fools (at least 20) went to this year's AGM for oil explorer, Soco International (LSE: SIA). Most of them went on to lunch afterwards and had a great time.

On the other hand, you do need to be careful. It's easy to be swept away by a charming CEO, and you may leave the meeting thinking that your company has an amazing risk-free future ahead of it. The best way to counter this is to attend more AGMs. That makes you more resistant to boardroom blarney.

Also beware audience enthusiasm. I remember attending an AGM for flat speaker company NXT (LSE: NTX) at the height of the technology boom. At least one hundred private investors turned up and gave the board a spontaneous round of applause. Back then, shares in NXT were trading at around £11. They're now 50p.

Of course, I understand that many people have other commitments and can't attend AGMs. But if you are able to get to some, I think they're well worth it.

If you don't have time to go to AGMs, you can quickly get in-depth knowledge of exciting companies by subscribing to Champion Shares, the Motley Fool's investment service. Sign up now for a FREE 30-day trial and read our latest recommendation, published on Tuesday.

Ed owns shares in Transense Technologies and Soco International. He no longer has shares in NXT.