Can A Company ‘Be Genuine’?
And while I initially planned to write a blog on how to start and reach a stretch goal, I’ve decided to dig in a bit more and share what I’m learning related to investing in companies.
Phil Town, Investment guru and author of the New York Times bestseller Rule #1, is hosting the workshop and is essentially responsible for kick starting my stretch goal. I saw him speak at a conference earlier this year and he invited our group to attend one of his upcoming intensives. I was reluctant to sign up because I was worried about getting lost in all the acronyms, percentages and stock jargon, but as I continue to wade into all the pre-work, that’s not what’s keeping me up at night! What I’m really stuck on is the third item in his “Four Ms” process.
Here are Phil’s Four M’s:
- Does the business have Meaning to you?
- Does the business have a wide Moat? (think of a castle keeping out invaders)
- Does the business have great Management?
- Does the business have a big Margin of Safety?
Phil writes about the importance of aligning our values with those of the companies we want to invest in. That makes total sense to me. Imagine if we all began to really research the values and integrity of those running the businesses where we know our money is invested? And what if we only invested in companies whose management teams are comprised of ethical, values-aligned, do-what-they say kind of leaders? Well, I’ve begun the research and what I’m troubled by is how we truly figure that out. Phil says we’re looking for an ‘owner-oriented’ CEO. He writes: “An owner-oriented CEO is one who has his/her personal interests directly aligned with the shareholders of the business — the owners.”
He advises us to start our research by reading the annual letters to shareholders. What we’re looking for is their passion for growing the company, their honesty if things didn’t go as planned over the previous year, and anything else that helps us figure out if the CEO is driven and owner-oriented. But I used to be in PR and I know the CEO doesn’t typically write his/her own speeches, let alone letters so I’m a bit skeptical about corporate messaging. I’ve gone into the websites and then googled managers separately to see if there are news articles and third party opinions and that has been useful. What I’d really like to do, however, is meet the CEO in person so I can gauge for myself if he or she is the kind of leader I want to bank my money on. That’s not always going to be possible, so I’ll keep researching.
But what if we took that one step further and, depending on what our role is in the company, started to think about how ‘aligned’ we are with those we use as suppliers or contractors, or even who we have as clients. Make a list. You’ll be surprised how many companies are represented not only in your workplace, but also your home.
When I was at the coaching conference where I first heard Phil Town speak, I also had the opportunity to participate in a campaign called LoveistheTrueBlack, a photographic movement headed up by Natalie Alexia rooted in social change. Natalie asks the simple question: “If you had a chance to share a message with the world, and could guarantee everyone would hear and understand you, what would you say?” For me, it’s “Be Genuine”. If we’re being genuine to ourselves and to those we’re connecting with, we’re being true to our values, true to who we really are and true to who we want to be. In my mind, that creates powerful wealth that overflows to everyone.
Wishing you full career alignment and success,