Ep. 438: More On Management Teams

Published: July 9, 2021, 4:11 a.m.

b'Quality Companies Outperform Over The Long-Term\\n\\nWe will say it until we are blue in the face: Management Teams Matter.\\n\\nA high quality management team starts with a high-quality CEO. Quality management teams build quality companies. They do the hard, tedious work required to build the best products and processes in order to deliver maximum customer value. CEOs of these companies typically share certain attributes. For example, they invest for the long-term and work to drive long-term shareholder value. They will not for example chase a short-term \\u201chype\\u201d opportunity to drive short-term gains as MicroStrategy (tkr: MSTR) CEO Michael Saylor has done in his pursuit of Bitcoin riches. Quality companies and CEOs such as Andy Florance of CoStar Group (tkr: CSGP), Henry Fernandez of MSCI (tkr: MSCI) and Bill Stone of SS&C Technologies (tkr: SSNC), are in it for the long haul. They won\\u2019t chase M&A targets with exorbitant valuations. They won\\u2019t roll out flavor of the month products that deliver negligible customer value. They will invest to deliver long-term shareholder value. This long-term approach may translate to underperformance during bubble periods such as the mother of all bubbles that we operate in today. However, quality management teams won\\u2019t blow you up. They won\\u2019t make poor capital allocation decisions nor deliver poor financial performance. Quality companies do tend to outperform when the economy and markets are soft and when markets are \\u201cnormal\\u201d. Quality companies also tend to outperform over multi-year periods. Below we benchmark CSGP, MSCI and SSNC vs. the NASDAQ Composite. Read full article here: https://tek2day.com/2021/07/08/quality-companies-outperform-over-the-long-term/'