What Prof. Bakshi explained in an interview applies here
*Evaluating management is an art. You should watch what they do and not what they say. And when you do that, you should have some empathy for the entrepreneur who is running the company. He is not a robot programmed to maximise shareholder value all of the time. He is prone to making mistakes. He will have some attributes that you dislike. Is that a reason to reject investing with him? I don’t think so. Time after time I have read about objections from investors who are obsessed with what Munger calls as Kantian Fairness Tendency. The world is not a fair place. There will almost always be some unfairness if you invest in a business run by an intelligent fanatic. You have to maintain a balance. I try to do that by keep Ben Franklin’s essay on Prudential Algebra in mind.”
To answer your question about rents paid by the company on properties owned by family members, if the management is delivering an ROE that is above the average ROE generated by other businesses in that sector, then why bother? (applies in most cases)
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