BG2008 Posted August 21, 2020 Share Posted August 21, 2020 Years ago, I did a little presentation on management red flags and it was a lively debate and I walked away smarter than I was going in. So I will this topic up again and list some observations. 1. If an investment manager is being compared to Buffet, be very skeptical 2. If an annual letter quotes Buffet, be very skeptical 3. If a company uses a lot of value investing lingos, be very skeptical 4. If you are doing a DD on a CEO and no one has anything bad to say, be very skeptical. It's because being CEO involves tough decisions. You will have to disappoint and/or piss off some people to make the right judgement calls. 5. Buying back shares to offset dilution, buying back stock for any reason other than it creates a lot of value is a red flag 6. Companies with high ROIC and growth figures that are highly prized by the investing community spinning off a lesser quality company and saddling it with debt and/or environmental liabilities, be careful. Companies have figured out that there are value investors willing to take the other side of the trade and dumping toxic waste into the spinoffs. 7. Contrarian - The market is right more often than not. Link to comment Share on other sites More sharing options...
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