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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Shane M who wrote (52565)	10/22/2013 12:44:40 AM
From: Jurgis Bekepuris	Respond to of 78774

Shane, Thanks for your reply. I think your example illustrates perfectly how hard it is to make decisions based on our positive or negative impression about the management. Retailing is hard. There are value investors who don't invest in retail, because they think (like Buffett thinks about tech) that it's impossible to get. Fashions come and go, labels (almost wrote "brands", but are they?) flourish and die. So there you have a guy, who's saying that it's tough for him to find "new right size" - but does it mean that he's an honest CEO who cares and who will find the right solution? Or does it mean that he's honest, but lost in the new landscape and we should sell, sell, sell? I guess (bad pun haha) you have to go with his past performance and your trust in his capability to perform in the future. And if you trust that then you can add the openness as another plus. But in total, I am still not sure if this would (partially?) outweigh the financials. I have seen CEOs who were lauded as geniuses and were cited in Harvard business school cases and then the tide shifted, company went down, and everyone thought that they were idiots. Were they really geniuses? Were they really idiots? I don't think so. Sometimes businesses turn dramatically and CEO can't do much. On the CEOs whom I did not like and I sold out: MHR Gary Evans - auditor replacement - classic "sell" case. I sold (after some short-term plays). I don't regret it, but people who held longer got bigger gain. ADVC - self serving founders/CEO - sold it, I think it's higher now. GOOG and AAPL - I mostly missed the gains because I thought the stocks were overvalued, but I also disliked the management, so perhaps that was part of the reason. I don't seem to remember cases where I hated management, sold and then the company did poorly. Perhaps CHK ... poor Aubrey, he's the favorite whipping boy for CEO overindulgence. ;) On the CEOs who I like: FRFHFs Prem Watsa - I like him yet I think he's making a huge mistake on BBRY investment and I am thinking whether I should dump FRFHF stock. I liked Steve Ballmer even though tons of people cry for his blood. Unfortunately, now I hold my remainder MSFT stock with company in even more unclear waters than it was with Ballmer. I think Jamie Dimon is a great CEO, but he might get killed with the regulatory storm. I kinda liked the shareholder's letter by Camellia management, but I wonder if they are honest underperformers. I liked DSX management, but I think that the sector is very hard right now. Like Buffett says: when great management join tough business, it's the reputation of the business that survives. :) Anyway that's what came to my mind. :)

To: Shane M who wrote (52565)	10/23/2013 12:00:11 AM
From: Justinfo	Respond to of 78774

I try to not rely too much on nuances from conference calls. I do try to get a sense if the management is vested in giving back value to shareholders. I did notice how management that is aligned/sensitive to shareholder interests makes it a point to reiterate this point. I watch for what I think of as key words like, returns, value etc.

To: Shane M who wrote (52565)	10/25/2013 9:15:37 PM
From: Jim P.	1 Recommendation Recommended By gcrispin Respond to of 78774

I have found conference calls very useful if you listen to the same people for several quarters. The example you gave is a neutral to me. Considering that the issues you heard means the company is experimenting and has not found the answer they are looking for. I have found single conference calls very useful in when companies are in turn around situations and the market is offering stock below book value. What the market is saying is fire sale prices and if management signals they have turned a corner the stock will react and likely you will have found a bargain. These signals will be clear even if not numerical. Consider the relief you would telegraph to people you have disappointed and use that as a measuring stick. It will be clear but considering this market and funding options, you may have to wait for another recession. Not so sure it works on the upside as enthusiasm is contagious and rarely makes you money. Jim