The Business Evaluation Framework that we use at Bastion Research
Welcome to this week’s edition of LEARNING OF THE WEEK! Continuing our SMART Framework series, today we we’ll examine the Second Pillar: Management
When we read about and listen to great investors discussing how they built their wealth over the decades, it’s clear that each has a unique investing style. Some may be cyclical investors, others focus on growth stocks, and some believe valuations don’t matter as long as the business is thriving. This diversity shows there isn’t a single path to building wealth in the stock market.
However, if there is one thing that stands out and is similar in the thought processes of the majority of these investors, it is MANAGEMENT—something that can either make or break their entire investment thesis. Regardless of how promising an investment or business may seem, if there’s any indication that the management is poor or untrustworthy, these investors won’t hesitate to walk away.
And we have seen it repeatedly, right? Even if a business is fundamentally strong, if the management is not good, shareholders will not make any money. On the contrary, even if businesses face high competition and frequently go through economic cycles, great management will not only survive harsh conditions but will thrive, creating great wealth for themselves and the shareholders along the way.
As Mr. Anil Goel said in the book Masterclass with Super Investors, “The key to investing in the stock market is to understand the business, and more importantly, understand the management.“
With that in mind, in today’s newsletter, we’re diving into the Second Pillar of the SMART Framework for business evaluation: Management. We’ll explore:
1. What defines good management
2. How to distinguish good management from bad
3. Examples of businesses with exemplary management
Click the link below to watch the full video covering how to evaluate management in depth!
MEME OF THE WEEK
