If you think that Part 1 of this series makes Value Investing look impossible for retail investors, part 2 would be even worse, we will be looking at Management Quality in this installation. Management Quality in this book is divided into two parts :

1. a) Does Management think and act like owners?

In this section, an investor needs to read management's minds. Somehow, you need to find out whether management acts for themselves or their shareholders. There are of course some hints at how to do so, one possibility is to see whether management owns the company shares and will benefit when the share price goes up. Another is to see whether there are any incentives to skew their behavior, like stock options. Notwithstanding, you need to be able to tell whether the manager is working for the shareholder or for himself, even though...