Good management is clearly important… but what are the attributes of good management? Our latest article goes over what we look for in a company's management including their skill, incentives, potential conflicts of interest and the types of lies they tell: the ‘good’ lie, the ‘bad’ lie and the ‘dangerous’ lie. Read more about the Cadence investment approach to assessing management here: (VIEW LINK)
Thanks Karl, I've generally found that for retail investors, assessing management can be one of the most difficult tasks. It's easy enough to read a balance sheet and a cash flow statement, but reading people is much harder - especially if you don't have any personal access to them. One method I've been using the past year or so is to go back and read 5-10 years worth of letters from the CEO and Chairman, taking note of the promises they've made and whether they've kept them. Of course this only works where management has been with the company for a long time, but so far I've found it very helpful.
"Generally speaking the bigger a company the more management gets paid." Perhaps this could also explain the proliferation of issues, sometimes at significant discount to NTA, that LICs have undertaken in recent years.