Value Town Wed, Oct 07, 2015
I've been doing some reading on investing, and I found an article outlining Warren Buffett's "tenets of investing" that he uses to determine whether a company is worth investing in. If ya'll aren't aware, Warren Buffett is an investor and philanthropist who is consistently rated among the top ten wealthiest people in the world. So he's got some skills. There are 15 principles, but for the sake of expediency I'll just go over three big ones:
1. Management's goal is to maximize long-term intrinsic value of business
2. Management is candid with shareholders
3. Management can resist industrial imperative
These points might seem simple, but common sense isn't always common action. Let's ask ourselves some questions based on the points.
Number One: Are we diligent? It's a disappointingly frequent practice for business leaders to value a company up just enough to cash out. Fortunately, we work every day to build the detailed infrastructure that forms a lasting company.
Number Two: Are we honest? Today's corporate culture is rife with deceitful practices that exploit people and resources for short term gain. However, I've never had reason to feel that our company leadership is "running game" to earn a buck at my expense, and I've never been directed to do anything I felt was unsavory or shady. That speaks well to our prospects, and helps me sleep at night.
Number Three: Are we steadfast? Technology firms are especially bad offenders, but any company can fall victim to "industrial imperative." This is just a fancy term for following every corporate trend that comes along. Not us, baby. We've got our core values and stick to them. Though the flood waters may rise, our house stands firm on solid rock.