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level: Managment

Questions and Answers List

level questions: Managment

QuestionAnswer
What are the 3 key characteristic of a CEO we are looking for?1) Passion 2) Stockholder Orientated 3) Honesty
What does Honesty means?willing to tell us the bad news along with the good
How many ways there is to talk about Management in Rules #1 pratice?2 - Subjective view and Objective view
Where to find subjective views about the CEO?Outside the Toolbox in various publications
Where to find Objective views about the CEO?Inside the Toolbox with the ROE & ROIC number analysis of the last 10 years
What are the 3 qualities you look for when hiring peope?1) Integrity 2) Intelligence 3) Energy
How many years a CEO is expected to stay at the minimum with a company?3 years
Which letter should we read and for how many years?The shareholder letters for 5 to 10 years
What should we listen to?Quarterly earnings
Where do we found the BHAG from the CEO (3 places)1) CEO Letters 2) Interviews Youtube / Magazine 3) Earning Calls
What can you ask the company employee (3 minimum)?1) What is the CEO name? 2) Do they believe they are valued? 3) Are they excited to work here?
Which type of external pressures the CEO might face (minimum 4)?1) from the Board 2) Active Investors with strong influence 3) Social Media 4) Charities
What are the 3 points / key financials we look at to evaluate the CEO work?1) ROE => 10% or higher and not decreasing 2) ROIC => 10% or higher and not decreasing 3) Debt <= 3 years based on current earnings
Why we want 3 years or less of debt?because in a recession, the company does not have to burn valuable capital to service teh debt
What does stock buy back do ?it increase the earning per share (less share) and therefore not too good if CEO and board buy back shares sometimes (not all the time)
How many shares % the CEO sells and we think that it could be an issue?30% (not counting stock option)
Name good sources to get information about the CEO (7 min.)?Youtube, Forbes, CNBC, Jim Kramer, Barron's, Google, Seeking Alpha
Normally (not always), what is the maximum for a future growth rate we expect?We expect 15% future growth rate but it can be more in some occasions (rare?)