@Strawman - no doubt referring to MBA-CEOs who went to the wrong schools.

Disc: I teach "MBA-CEOs" as a side hustle ;-)

Hmmmm.....maybe...maybe a bit of a rant, but it is reasonably clear that a CEO with an ST timeframe, and ST profit maximising usually leads to trouble down the track, and CEo's who know little about the industry or the nuances of product value also ultimately lead to trouble. people point to owner-operators as better, the data is a bit mixed but when looked through the lens that these CEO's are usually, LT in focus and have an intimate knowledge of the industry, customers, competitors and products, the reasons for their success becomes more apparent.

Agree about S/T timeframe. But S/T timeframe has little to do with having an MBA or not.

Don't forget, lots of "engineers" go on to do MBAs and then become Engineer-MBA-CEOs including Tim Cook, Sundar Pichai, Satya Nadella etc. I'd say that about 25%+ of my students are engineers who want to learn more about business with a portion wanting to start their own.

MBAs don't spend a lot of time teaching you about managing short term financial performance. They do spend a lot of time teaching you about strategy and competitive advantage, resource allocation/capital allocation, valuation, technology adoption, leading people and teams, market positioning etc. A good MBA equips you to manage across all timeframes - short, medium and long - because that is the challenge all managers. I've never known a successful CEO who got away with focusing on only one timeframe.

Yeah it's a bit harsh @mikebrisy , and broad generalisations aren't usually helpful.

Plenty of exceptions to the 'rule', for sure. (Probably the ones who had a good teacher such as yourself!)

It's probably better labelled "Career CEOs" or something, and as you've said previously you could probably lay plenty of blame at the feet of the board who set terrible incentives.

Hey Mate, I agree with almost all of it except for point one. Which I think is not as black-and-white as it and more nuanced than it sounds IMO. Depending on the information and relationship to where it came from forming your own opinion in some cases be detrimental and a big net negative.

For example, when I bet sport and would often give tips to my friends. I would ring them after a good week and find out that their results were not as good. Turns out they would take all my selections and then only bet on the ones that they liked. In other words, they were asking me for my opinion, expertise and sections from hours of rigorous research but then spending a few minutes deciding which ones for worthwhile.

Take two extreme examples:

1. You read about a stock on livewire and it sounds great. The writer has an agenda and is pushing a stock they have likely own for some time, the return profile is unlikely as good as when they bought it and they won’t be there to let you know if the thesis changes or they are selling. You must do the work and form your own opinion.

2. You are lucky enough to be the nephew of an extremely good investor let’s call him Warren. Warren calls you and says he has a really good stock that is too small for them but thinks you should buy some and he will let you know if anything changes. You have a couple of options.

a) Go and buy the stock.

b) Thanks Warren I will take a look into it and see what I think.

Option b) is a huge mistake and example of massive overconfidence bias. There is a strong likely hood you won’t see what he sees or perhaps see problems that he has dismissed. You run the risk of passing on an incredible opportunity.

Long story short, the more work you have done vetting the information source the less work you can then do vetting the investment and your opinion is not always helpful.

The market being the collective of all participants and I am just one participant so starting from a baseline that the market is close to right most of the time seems  sensible. Then search and find those cases when the market is missing something. The lower the liquidity the more chance the market is wrong.

The challenge of course is if the market can't price it correctly now, what will cause it to price it correctly in the future? As if it doesn't, then we may be right, but may not actually making any money.

Perfect example @camsmedts34, thanks for sharing.

I think PE is a good start for something like a LIC/LIT/REIT where I use it as a guide (Earnings Yield) along with NTA to the price discount but agree for pricing a company it is really a poor guide to cheap most of the time.  

Sharing some of my favorite moments from Twitter this week (one or two might even have an investing theme...)

On Cricket:

On Tennis:

On Growth investing:

On Latitude's offer for Humm's consumer business:

On Non-Fungible Tokens:

All good picks Noddy! The last two in particular gave me a good laugh.