hello, I think certain metrics/data over time can provide a clue on management's capital allocation effectiveness. Growing free cash flows per share, high/increasing ROE/ROA/ROIC over a period, generally low levels of debt. However, characteristics like honesty, integrity and how they treat stakeholders compared to themselves are much harder to tell. I could be wrong, open to being corrected.
I think that is a very good point. You can also get a gut feeling by studying their IR materials and how they handle earnings calls. But yes, at the end of the day, you cannot assess the individual characters.
Very cool article! It is often very difficult for a retail investor to assess how good the management is.
hello, I think certain metrics/data over time can provide a clue on management's capital allocation effectiveness. Growing free cash flows per share, high/increasing ROE/ROA/ROIC over a period, generally low levels of debt. However, characteristics like honesty, integrity and how they treat stakeholders compared to themselves are much harder to tell. I could be wrong, open to being corrected.
I think that is a very good point. You can also get a gut feeling by studying their IR materials and how they handle earnings calls. But yes, at the end of the day, you cannot assess the individual characters.