Forum Archive Index - February 2001

["Ben Dutton" <bendutton@sharechat.co.nz>]

Hi John, Yes, that is absolutely true - he certainly isn't contrarian when
it comes to traditional fundamentals, but he is different in that he will
not fraternise with management in case they spout "propaganda".  While this
may work for him, I don't necessarily agree with this approach.  I think a
healthy balance of fundamentals and "intangibles" (like knowing what
management is like) can be achieved and, in some cases, knowing the
management of a company and their vision is an absolute must.

For instance, when looking at investing in a new business or industry with
no previous track record or earnings to compare or study one has to believe
in the management and their vision.

Lets take an obvious example and look at Microsoft.  Who would have thought
that when MS was first founded those kids were on to something?  Well, some
investors believed them - and have benefited enormously.  But, these
investors had to believe that the PC would rise to dominate our society -
and Bill Gates, Paul Allen and co. had to persuade them that this would be
the case.  People like Robert Olstein would have missed out.

But, admittedly, Mr Olstein is a trader, and the stocks he seems to favour
do have track records and industry comparisons for earnings etc.  So maybe
this approach works for him, but it certainly can't be applied to all
investing.

Best Regards

Ben Dutton

----- Original Message -----
From: "Wedde, John" <john.wedde@cit.ac.nz>
To: <sharechat@sharechat.co.nz>
Sent: Wednesday, February 21, 2001 10:40 AM
Subject: RE: [sharechat] Know your company's management? A contrarian view


> Hi Ben,
> Good article. Don't you think most of his arguments were based on good old
> fundamentals though?
> >From where I see it there is nothing really more important when assessing
a
> company than the Balance Sheet and the Income Statement. One of my most
> important maxims has always been to judge people on what they do, rather
> than what they say, or, as the old saying goes "actions speak louder than
> words".
> Cheers
> John
>
>
>
> -----Original Message-----
> From: Ben Dutton [mailto:bendutton@sharechat.co.nz]
> Sent: Wednesday, 21 February 2001 07:42
> To: sharechat@sharechat.co.nz
> Subject: [sharechat] Know your company's management?
> A contrarian view
>
> Came across an interesting article in Forbes magazine the
> other week - check
> it out here:
>
> http://www.forbes.com/global/2001/0219/065.html
>
> It's about a fund manager in the States who, considering the
> size of his
> fund, takes an unusual approach to his investments.  His
> secret?  Don't
> interview the management of a company.  Here's an excerpt:
>
> '"Why should I talk to the ministers of propaganda?" he
> says. "I want to see
> what people do, not what they say." Instead, he says, look
> at the financial
> statements, especially footnotes.'
>
> Interesting approach.
>
> Best Regards
>
> Ben Dutton
> (Disc. I still like to know the management - but the article
> did make me
> think).
>
>
>
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