IMO, it’s a gut feel one develops after scanning leadership for checks such as:
- Promoter: Owner Operator [Pay, Ownership, and RPT | Pledging; Selling…?]
- Incentives
- Prior Experience and CareerFootprints
- Strategic Plan Vs Day today Improvements
- Approach to Issuing Guidance
- Mgmt. Style: Centralized/Localized
- Senior Mgmt timeline of last 10 Yrs.
- Type of Board Members
- Capital Allocation: FCF - Reinvest | Cash | Dividend | Buyback | Acquisition
- Moment of Integrity [Behavior under stressful situations]
- Clear and Consistent communication with shareholders [MD and CEO Letter/Talk - Talks about Important Issues, Easy to Listen to, You Learn from the Mgr. | Beware: Seeded with PR, Copy of MD&A, Jargons, Double speak]: Answers or Responds to the questions.
- Independent Thinking ++ Avoids Me Too Attitude
- Self-Promoting [Frequent Media Appearances, Promotes share price]
- Accounting: Aggressive or Conservative
Even after spending time on all these, one could never be 24Carat sure.
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