Focus on Management Excellence; My Interview Did NOT Go Well!

Identifying-Managers-with-Talent-and-Integrity-May-2017

Perhaps you should differentiate yourself by focusing on management’s character and skill.  However, you will need to focus and work hard to make a difference in understanding who is unique.

Find founder-led companies who are mission driven–one place to start your search.

Imagine putting the numbers of Berkshire Hathaway during the early days of Buffett’s takeover into a spreadsheet–would ANYONE have bought Berkshire.   Who would have focused on Buffett’s integrity and skills?

Also: https://microcapclub.com/2018/05/invest-in-owner-management/

My Interview at Goldman Sachs

 

Interviewer: Are you unbiased?
John Chew: What a dumb question! Next.

Interviewer: No matter how you answered that question, how could you have an edge in researching companies?
John Chew: Well, I ……………..

and

Any suggestions? Is it possible to be unbiased? And based on your answer, how can you have an edge researching companies? Prize.

3 responses to “Focus on Management Excellence; My Interview Did NOT Go Well!

  1. Different Mindset for the Stock Market
    Investing in the stock market requires a very different skill set, though. Conviction certainly sells in investing. Just like most other areas of life, investors naturally migrate toward people who are willing to tell them they “know” what is going to happen, especially in the short-term. If you don’t believe me, just watch CNBC. Throughout the day, you will see a variety of market experts come on and tell you where the market, individual stocks, and other asset classes are going over short periods of time. They will tell you it with such conviction that you want to believe them. They will say it with such certainty that you won’t envision any other outcome being possible, just like successful founders of startup companies do. But unlike the startup world, where that level of conviction from founders is an asset, in investing, it is a significant liability. The reason is that they are trying to predict something that massive amounts of historical evidence suggests is not predictable in the short run.
    As an investor, you want to run as fast as possible from that type of short-term certainty. To invest successfully, it is essential to understand that outcomes over periods of five years or less are much more likely the result of luck than skill. They are much more likely noise than signal. Predicting short-term outcomes is a losing game. The key to investing is a have a long-term plan that is based on evidence and then to show unwavering conviction in the short-term in pursuit of that plan. Having conviction long-term is great and a key to success. Taking action in response to the short-term conviction of others is the opposite.

  2. John,

    What, in your view, are the differences between growth investing and momentum investing?

  3. Momentum is all about price movement and/or acceleration while growth investing is about the profitable growth of the business or profit growth above the cost of capital to fund that growth.

    Momentum means buy winners since winning tends to persist…for the short-term however short-term is defined.
    “The profits attainable by purchasing the historically strongest stocks are superior to the profits from random selection. 1967 paper by Robert Levy, Relative Strength as a Criterion for Investment Selection.

    Momentum means a continuation of past relative returns.

    To summarize, growth investing, as measured by high price to fundamentals, is not the same as momentum investing, as measured by strong past relative performance. –Vogel.

    John Chew: I agree with the standard def. of momentum but disagree with the def. of growth investing–high price to fundamentals. Profitable growth is part of value, but you are in dangerous territory in estimating how long and fast the growth will be. Why a “High” price?
    Hope that helps and does not confuse.

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