One of my favorite sayings from Charlie Munger, which he borrowed from the mathematician Carl Jacobi, is 'Invert, always invert.' My reversed questioning: In what way can I quickly ruin my investment portfolio?
Thanks, Sam, I'd like to add a few that I often use to recognize if a business is a value/quality trap:
-Over promotion of management, 'to the moon' kind of ambition and mission statement - think Peloton, Teladoc, Skillz,
-Management compensation doesn't change when business performance falls
-Complicated corporate structure/strategy
-High cash level but no clear strategy or execution of allocation
-Not acknowledging competition
-Management has poor track record of meeting near/mid term goals
-Falling ROIC, margins without legitimate reasons
-Falling market share
-The company isn't printing cash even at the peak of an operating cycle
....among a few others
Very nice additions!
Thanks, Sam, I'd like to add a few that I often use to recognize if a business is a value/quality trap:
-Over promotion of management, 'to the moon' kind of ambition and mission statement - think Peloton, Teladoc, Skillz,
-Management compensation doesn't change when business performance falls
-Complicated corporate structure/strategy
-High cash level but no clear strategy or execution of allocation
-Not acknowledging competition
-Management has poor track record of meeting near/mid term goals
-Falling ROIC, margins without legitimate reasons
-Falling market share
-The company isn't printing cash even at the peak of an operating cycle
....among a few others
Very nice additions!