Idiot proof companies

Investors are constantly forced to assess the sustainability of company business models when looking at adding new stocks to their portfolios or critically evaluating the companies that they currently own. Indeed, an institutional investor may be exposed to the management teams from several hundred companies in any given year. Amongst those companies, they will find large variations in both management and business model quality. During bull markets with supportive business conditions, it can be quite difficult to separate management quality from the positive tailwinds the business is currently enjoying. In this week’s piece, we are going to look at the characteristics of ‘idiot proof’ companies and the reciprocal which are companies that typically need both supportive market conditions and a strong management team to prosper. Obviously, the conditions of strong management teams and a sympathetic business environment are rarely permanent. Read the full story in the attached update.