Honest and competent — those are the traits Warren Buffett looks for in management before investing in a business. Managers must have integrity, intelligence, and the skill to allocate capital. They must have the ability to think like owners — to create value long-term shareholder value by reinvesting in existing operations, acquire businesses at reasonable prices, repurchase shares below their intrinsic value, and pay down debt.
Managers who defy the laws of value creation will eventually cause the business to lose value over time. For example, there was a recent article in the Wall Street Journal about the strategic ...
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