| What are the 3 key characteristic of a CEO we are looking for? | 1) Passion
2) Stockholder Orientated
3) Honesty |
| What does Honesty means? | willing to tell us the bad news along with the good |
| How many ways there is to talk about Management in Rules #1 pratice? | 2 - Subjective view and Objective view |
| Where to find subjective views about the CEO? | Outside the Toolbox in various publications |
| Where to find Objective views about the CEO? | Inside the Toolbox with the ROE & ROIC number analysis of the last 10 years |
| What are the 3 qualities you look for when hiring peope? | 1) Integrity
2) Intelligence
3) Energy |
| How many years a CEO is expected to stay at the minimum with a company? | 3 years |
| Which letter should we read and for how many years? | The shareholder letters for 5 to 10 years |
| What should we listen to? | Quarterly earnings |
| Where do we found the BHAG from the CEO (3 places) | 1) CEO Letters
2) Interviews Youtube / Magazine
3) Earning Calls |
| What can you ask the company employee (3 minimum)? | 1) What is the CEO name?
2) Do they believe they are valued?
3) Are they excited to work here? |
| Which type of external pressures the CEO might face (minimum 4)? | 1) from the Board
2) Active Investors with strong influence
3) Social Media
4) Charities |
| What are the 3 points / key financials we look at to evaluate the CEO work? | 1) ROE => 10% or higher and not decreasing
2) ROIC => 10% or higher and not decreasing
3) Debt <= 3 years based on current earnings |
| Why we want 3 years or less of debt? | because in a recession, the company does not have to burn valuable capital to service teh debt |
| What does stock buy back do ? | it increase the earning per share (less share) and therefore not too good if CEO and board buy back shares sometimes (not all the time) |
| How many shares % the CEO sells and we think that it could be an issue? | 30% (not counting stock option) |
| Name good sources to get information about the CEO (7 min.)? | Youtube, Forbes, CNBC, Jim Kramer, Barron's, Google, Seeking Alpha |
| Normally (not always), what is the maximum for a future growth rate we expect? | We expect 15% future growth rate but it can be more in some occasions (rare?) |
