Today’s markets seem to be running on euphoria and FOMO, ignoring fundamentals so often, let alone integrity.
Any thoughts on how you’re applying your time-tested filters in an environment with so much noise? Is the goal simply to stay patient and be wrong a lot until the good folks eventually get proven right?
Thanks, Harry. I think an investor needs to keep doing scuttlebutt research and talking with as many competitors, former/current employees, management, suppliers, etc. as possible to triangulate information and develop insights. Even Buffett has made mistakes sizing up character, though he probably has the best batting average of anyone in the game. So the goal shouldn't be 100% accuracy, but keeping our eyes and ears open for things that just don't look, sound, or feel right.
Spot-on reflections by Buffett; years of experience boiled down to a few paragraphs of thoughtfulness.
I would add to your section on corporate governance to keep an eye on which companies are included in a company's peer group; all too often they are constructed to include only US companies--and their significantly higher compensation packages--and exclude international peers, despite often being closer competitors than those chosen.
This resonates deeply with my experience as an investor. The West Point analogy is particularly apt - just as military units need integrity from the top, so do corporations. I've noticed that when CEOs claim to be 'shareholder-focused' but their comp structures tell a different story, that's usually a red flag. The downward spiral you describe is real - once employees see managment cutting corners, they feel justified doing the same. Thanks for the thoughtful framework on evaluating this crucial but often overlooked factor.
Well said, Todd. Great advice.
Today’s markets seem to be running on euphoria and FOMO, ignoring fundamentals so often, let alone integrity.
Any thoughts on how you’re applying your time-tested filters in an environment with so much noise? Is the goal simply to stay patient and be wrong a lot until the good folks eventually get proven right?
Thanks, Harry. I think an investor needs to keep doing scuttlebutt research and talking with as many competitors, former/current employees, management, suppliers, etc. as possible to triangulate information and develop insights. Even Buffett has made mistakes sizing up character, though he probably has the best batting average of anyone in the game. So the goal shouldn't be 100% accuracy, but keeping our eyes and ears open for things that just don't look, sound, or feel right.
Spot-on reflections by Buffett; years of experience boiled down to a few paragraphs of thoughtfulness.
I would add to your section on corporate governance to keep an eye on which companies are included in a company's peer group; all too often they are constructed to include only US companies--and their significantly higher compensation packages--and exclude international peers, despite often being closer competitors than those chosen.
Really enjoyed reading this. Thanks
This resonates deeply with my experience as an investor. The West Point analogy is particularly apt - just as military units need integrity from the top, so do corporations. I've noticed that when CEOs claim to be 'shareholder-focused' but their comp structures tell a different story, that's usually a red flag. The downward spiral you describe is real - once employees see managment cutting corners, they feel justified doing the same. Thanks for the thoughtful framework on evaluating this crucial but often overlooked factor.