corporate debt management and a good team of leadersThere is no "I" in team. The managers and the leaders of the company better be able to perform well or you will be having serious problems since your now part owner. The board of directors are elected by you the stockholders and thereby we get the CEO of the company. You can think of him for comparison as the president of the U.S. except it's not the U.S. it's the company that you have your money into. So how do we know if the master of the ship who we left in charge is any good? Well the first way I tell is by looking at a few simple rules. How long has he been a CEO of the company? During the period that he has been a CEO how much debt has the company had? How much immediate debt does it have right now? The reason I think that debt is so important, is because as long as you are in debt you are a slave to someone else. That's right so long as that company owes a bunch of creditors like bondholders and banks they are to a certain degree slaves to them. After all the bondholders and creditors get paid before you do even as a stockholder in the company. The CEO wields the most power and is the most important figure-manager in most companies. investment brokers advice No debt for investing in stocksHaving very low or NO long term debt is a sign that the mangers and the TEAM-ceo have been working together doing their job with corporate debt management and making sure the borrowing of money doesn't get out of hand and slow down the business. The next thing I look for is how old is the ceo in age? Yes I know this might sound like age discrimination but it is a fact of life that the longer you have lived the more experience you have. Lastly what is the CEO's past history as an executive? Was he on the board of another company? Was he a CEO of another company? How well did the company do that he was the CEO of? How well did the company do that he was on the board of directors of? Was the company he was in charge of handle corporate debt management well? If he has any videos where he is talking does he sound like he is legitimate? You need to study the management team thoroughly before you make any kind of long term commitment of money or even short term really. In a sense you and the other stockholders are hiring them to work for you. Do you want someone working for you that is not competent? simple investing There is also an old saying that says that you should choose companies that any old idiot can run becasue someday and idiot probably will be running it. This means that some companies are more prone to management failure than other. Companies like power companies that have more of a monopoly are less prone to being affected by poor management but every company is effected to some degree and especially if the corporate debt management gets out of hand and bill start piling up. |