Widely read:
The difference between a good and a bad company often boils down to the people running them. If you think of companies that have grown shareholder wealth many times over the last 10 years, what is the one thing they all have in common? On the flipside, almost nothing can cause the downfall of a company in quite the way poor management can. Of course, there are lots of ways in which management can be found wanting, from lacking expertise to being incompetent and unmotivated to being downright dishonest. But all of it is bad news for the company and its shareholders.
When analysing companies to invest in, you may be tempted to disregard this factor if you think numbers are all-important, or if you find information on management hard to come by. But accurately assessing the quality of management is indispensable to finding great stocks. And yet, this is something that is in fact rather difficult to evaluate, as there is no formula or numeric filter to weed out companies with poor management. But if you look more closely, there are plenty of tell-tale signs investors can pick up on. And in the next Value Investing webinar, we explore them in greater detail.
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