OLD ARTICLE – Original posted on June 21, 2018 A traditional view wants a listed company to have their management as large shareholders. This gives them skin in the game, aligns them to shareholders and incentivizes them to succeed. All perfectly good reasons. But, this did not prevent Steinhoff from happening. If anything, this was…
Tag: incentive
Lessons: Management Over-value Themselves
OLD ARTICLE – Original posted on January 16, 2020 Per Wikipedia’s definition, “…illusory superiority is a condition of cognitive bias wherein a person overestimates their own qualities and abilities, in relation to the same qualities and abilities of other people.“ People tend to think that they are of above-average intelligence while, statistically, at least half are not….
Five Reasons Not To Invest In A Stock
OLD ARTICLE – Original posted April 1, 2016 Given the small cap space as a capital growth asset class and my predisposition towards being long, this website tends to be about which stocks to buy. Let me turn that on its head and give some (hopefully intuitive) pointers for which stocks to not buy. When you are…
Independence = Overrated; Incentive = Underrated
OLD ARTICLE – Original posted on June 18, 2015 There is a lot emphasis on independence in various roles in financial markets. External auditors have to be independent, advisors hopefully too, wealth managers, some members of company Boards, and so on. All independent. But why? The theory goes that if a person is independent, then…