If you have any questions on trustworthiness or competence, then avoid the company. The people running the firm must have the highest integrity and openness. They must be candid and not prone to hyperbole. You must feel that managers are giving a truthful and balanced view of the business.
They must be willing to discuss the minuses as well as the pluses – because all businesses have both.
And they must be managers who under-promise and habitually deliver a bit more than they indicated. Be very wary of those who promise great advances because they are unlikely to deliver.
“You can’t make a good deal with a bad person” (Warren Buffett). The purchase of shares is a deal: you must be reassured that stewardship of the company is in good hands.
If there are blemishes on their character, then be wary because people rarely change. If managers are unethical and dishonest no amount of corporate governance checks (e.g., outside directors) or accounting probes will reveal the truth; there are simply too many ways for managers to pull the wool over the eyes of investors. They can get away with spin and falsehoods for many years.
Tip: unreliable types
Prof. Glen Arnold
I'm a full-time investor running my portfolio from peaceful Leicestershire countryside. I also happen to be UK´s best selling investment book author and a Financial Times Best selling author.
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I write 2 to 3 newsletters per week - investing is about making the right decisions, not many decisions.