I have come to appreciate that most important aspect of investing is growth and management quality. Rest everything is noise. Management dropping x million$, although impressive, could just be their greed to make money in the hope of a turnaround. Many times insiders don't understand their business well enough, but I haven't really found a good way to distinguish incompetence over bad luck yet
A lot of the times, incompetence looks like bad luck (entire industry suffered so lets give them some slack), but we should be a harsh grader in this business.
I think both conn and vertex could have been informed by macro context. Consumers bought durables during lockdown then they didn't want furniture, they wanted vacations. Vertex was focused on a fashionable idea, green diesel.
Any existing write up companies these lessons change your outlook on?
Probably Babcock and Wlicox $BW falls into the pattern of making understandable mistakes. But why buy a company that is making mistakes at all?
I have come to appreciate that most important aspect of investing is growth and management quality. Rest everything is noise. Management dropping x million$, although impressive, could just be their greed to make money in the hope of a turnaround. Many times insiders don't understand their business well enough, but I haven't really found a good way to distinguish incompetence over bad luck yet
A lot of the times, incompetence looks like bad luck (entire industry suffered so lets give them some slack), but we should be a harsh grader in this business.
I think both conn and vertex could have been informed by macro context. Consumers bought durables during lockdown then they didn't want furniture, they wanted vacations. Vertex was focused on a fashionable idea, green diesel.