I think in every company, you want management that is skillful, that has talent, and preferably that has their interests aligned with yours as a shareholder. In other words, ideally, they own a lot of shares in the company you invest in.
Good management is management that can adapt to change. That is key because when I started to work on Wall Street, the favorite stocks among institutional investors were companies like Sears, JC Penney, Kodak, Xerox, Polaroid, and so forth. Most of these companies have disappeared because management was not able to adjust to the changes in the world.
There was at the time an analyst who followed the photographic industry, in particular Polaroid and Kodak. On the periphery she followed Fuji photo film as well.
Her projections depended on how many people in the world would buy a Polaroid camera over the years, how many pictures the world would take with Kodak cameras, and how much film Kodak would eventually sell.
Eventually, her projections were all surpassed—just not with Kodak film and Polaroid cameras. But with mobile phones that were taking pictures electronically. Nowadays, you see every idiot taking pictures all the time to put on Facebook, or to look at him or herself (nobody is interested in these pictures except themselves!) but it didn’t benefit Kodak and Polaroid.
That is why I always am skeptical about these studies.
