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Strategies & Market Trends : Bankruptcy Predictor Model -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (260)	3/31/1999 1:04:00 AM
From: Bob Rudd	Read Replies (2) \| Respond to of 477

MANAGEMENT EVALUATION: I would love to be able to effectively analyze quality of management, but unless you've got an in, it's often real tough to do. Phil Fisher and Warren Buffet discuss at length the importance of it, but they had access to the managements they studied. As a turnaround consultant, access to management and cooperation would have to be part of the upfront contract...or it would be a no go. As a distant investor, without direct access to management or inside contacts about the best you can do is inference. Some say financial ratio's like ROE are indicative of mangement effectiveness. Others look at reputation. Often though, the companies with obviously superior management, the Dell's, Microsoft's, Cisco's and such sell at such exalted multiples that this value investor just ain't gonna pay. What I do try get a feel for is competitive position and strategy. This sort of fits the product/services area, but is broader to include delivery systems and competitive environment. I find this a lot easier to get a handle on than management competence and sometimes it's more useful. Buffett has said that when a management with good reputation is put in an industry with a reputation for bad fundamentals, it's the industry that retains it's rep. For analysis of competitive environment I rely on Porter's ideas...awesome... anybody that hasn't read his "What is Strategy" essay is really missing something. Didn't mean to ramble, but I agree that qualitative issue's should be a part of deeper analysis though not initial screens. Bob