RS Weekly Update - Management, ATVI & Alleghany
As an investor, one of the things I take very seriously is the quality of management. Because let’s face it, if management isn’t doing their job, it doesn’t matter what the company does. Poor management ultimately begets poor stock performance. It may not happen all at once. But trust me, eventually it happens.
That is why part of my investing process is focused on learning more about management and their role within the company. History, ownership and track record are a few examples of things I look for. And it isn’t easy. In fact, many times we need to prioritize what is most important to us when assessing management. But having a clear understanding of who is running the company and what their incentives are can really make the difference between success and failure.
On a personal note, I recently had the great pleasure of interviewing the CEO of Ford Motor Company, Alan Mulally. While I am not personally invested in the company, I did a bit of research beforehand so I didn’t look like a total fool (note the little ‘f’). Between my research and the interview I am convinced that Ford has a quality man behind the wheel. And if I ever do decide to buy shares of Ford, I can tell you that I’ll feel good about it as long as he’s there.
Of course we won’t always get the chance to actually interview a CEO. But nothing is stopping us from learning all we can. Hone your Google-fu to find out everything you possibly can. And hey, drop a line to investor relations. You never know when you may get lucky.
Jason Moser (TMFJMo)
Activision Blizzard (Nasdaq: ATVI) is back at it again. Call of Duty: Black Ops was released this week and the unofficial numbers have it as selling over 5.5 million copies in the first day alone and hitting $360 million in revenue. The company continues to break records with each and every killer release and I suspect that the impending release of World of Warcraft: Cataclysm should rattle a few consoles as well.
Welcome Alleghany Corporation (NYSE: Y) to the watch list! Alleghany is an insurer similar another Foolish favorite, Markel (NYSE: MKL), though I would consider them possibly a little more conservatively run. With a market cap of $2.7 billion, it fits right into that mid-cap space offering a lot of room for growth. While insurance has witnessed a soft market over the past few years, the winners coming out are the disciplined underwriters that offer their CIO (chief investment officer) all of that “free” money to invest in the form of float. And with investment interests in the form of real estate and energy exploration, this is a great way to invest in a company that is geared toward long-term growth and returning value to shareholders; two of my favorite things!
Jason owns shares of Markel
Straight from the Onion
The storm of the century: http://onion.com/djbj2y