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How to Assess Quality Management for Value Investing

It’s crucially important when evaluating a listed company that you can assess quality management for your value investment.

This is a key fact to carefully consider the quality of a company’s management and board of directors.

In most cases a company is only as successful as the people running it.

And a big part of value investing is making sure that the business you buy into has a reliable experienced and forward thinking management style behind it.

One of the key factors in determining whether or not a business is on top of its game is to have a look at what gives it its competitive edge in the marketplace and whether or not its management team has an ongoing plan in place for making the most of this competitive advantage.

This means that management is not only acknowledging the competitive challenges that constantly threaten their company but is adapting and responding to those challenges in a realistic and timely manner to determine how well a company’s management is doing in operating and expanding their business.

You can use some efficiency ratios.

And another great way to evaluate the quality of the management is looking at their companies competitive advantages.

You need to make sure to the best of your ability that the people you are trusting your money with have proven themselves as effective decision makers and leaders within their industry will dive deeper into how to identify companies competitive advantages in the next module.

You know great companies should have great management teams a great management team should focus on generating growth over time which is the best way to reward long term shareholders like yourself.

So remember: only look for companies that have both strong management and a sustained competitive advantage.


Comment ( 1 )

  1. This is something I need to study further because if the company has a clubby board and the managers don’t care about anything but their compensation, then they do not deploy capital well and do not make a good return on your capital. Robin Cro

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