Management and its importance

There are many factors to consider in reviewing the investment. I've seen research"of the pores in"investors, income statements and balance sheets. Although these issues are important, the main indicator of future success of each investment management team. I saw the quality management investment more skeptical of success, while the evidence of mismanagement the most promising companies to invest in a total loss. It is important to assess the history of any team leadership, incentives and reputation before making any capital investments.

It is said that"history repeats itself ". It covers a lot of truth when it comes to corporate governance. If the CEO of the company is considering an investment that caused the bankruptcy in the last four companies ran, maybe you should consider a different investment. Such information is not of course offered in the literature of investment promotion, so it'll have to do research on your own to get it. A bachelor's degree or a degree from an expensive college that appears on a resume, but as an investor you should be more interested in his performance at a previous employer. If he or she was on the computer in a public company, you really should look at the growth trends in revenue and actions during this period. There is also nothing wrong with a private company that he or she has previously worked for the call and talk with some employees y.
By ensuring that management has an incentive to work well and the skin"in the game"is crucial. An investor, you need leadership to have a vested interest and feel the same feelings you do when the company does well or struggles. I've seen cases where management has almost no equity and taking very high salaries. They show little interest in the company needs money and the student through a private placement or secondary offering, which dilutes existing shareholders substantially all. I've also seen in the management of high-paying places, while he spent most of their job applicants in time for the next opportunity. They jump into the "sinking ship'just before the company goes under and the ability to pay large salaries careers that shareholders'hold the bag"\. If the company you invest is not yet profitable, you will see that most of management compensation in the form of capital or consider a different investment.

Finally, what is the reputation of your potential team of investment management? A few dollars in the cost of background checks can now save even more money in the future. They have a criminal record? They were named as defendants in civil litigation on several occasions? What their competitors or independent analysts believe them? It's all the questions you should answer before investing in a company or fund.

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