276- Four Ms Checklist: Management Analysis Part 4

InvestED: The Rule #1 Investing Podcast

Phil Town & Danielle Town

Investing, Business

4.6 • 1.6K Ratings

🗓️ 28 July 2020

⏱️ 32 minutes

🔗️ Recording | iTunes | RSS

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Summary

Management is one of the key factors to consider when looking for companies to purchase, and that involves analyzing the CEO’s compensation. You must understand how management gets compensated, and know that they are getting paid for building a better company—not for having a better stock price. This week on InvestED, Phil and Danielle discuss why it’s important for CEOs to get compensated for having low debt, high free cash flow, high owner earnings, and expanding the moat to protect against competition. For show notes and more information, visit www.investedpodcast.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Hey everybody this is Phil Towne
0:06.8	this is Phil Towne and this is Danielle Towne welcome to the invested
0:09.9	podcast we are doing investing Warren Buffett style here.
0:14.0	Heck yeah!
0:16.0	That's what we talk about.
0:17.0	And we're in the middle of a series on our checklist that we use to go through the rather simple, easy, effortless, I shouldn't say easy ever.
0:29.0	The simple investing strategies that we do.
0:33.0	Which, you know, to not beg the question, but we just want to buy businesses we understand that have a big moat, good management, and they're on sale.
0:43.0	Simple, simple.
0:44.7	And predictable from Bill Ackman.
0:46.9	Simple and predictable.
0:48.5	Simple and predictable businesses.
0:50.8	And we like them to be wonderful, which means that they have a lot of protection from competition,
0:59.0	and that shows up in certain kinds of numbers.
1:02.0	And those are the things we look for after all the thousands of numbers you can look at in a business.
1:06.0	We really only have to look at a few to get a very, very quick idea.
1:10.0	Lelu, Lelu says, you know, minutes a maximum on a business to get an idea if you think it's a
1:17.6	decent business or not. Don't he really that's what he said five minutes?
1:21.8	Five minutes five minutes. Five minutes.
1:23.5	I would love to know what he reads for those five minutes.
1:27.4	Oh, he's just looking at the S&P 500 book on the S&P, out of you know some website.
1:34.0	What do you mean you think he's looking at he's looking at the financials for five minutes?
	...

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