Swing trader and sometime investor Michael K. Dawson aka The Trend Rida has an extremely important post up for anyone actively picking stocks in this day and age. He talks about a qualitative measure that doesn’t show up in any screens but should be as central to an investment thesis as almost any data point one could think of.
Michael asks us to evaluate whether or not the CEO of the company even understands what the company does…
Carol Bartz the former CEO of Yahoo was once asked, What is Yahoo? Her response was: “Yahoo is a great company that is very, very strong in content for its users. It uses amazing technology to serve up what we increasingly think is going to be the Web of One.” I consider myself fairly tech savvy, but that explanation means absolutely nothing to me. If a CEO has trouble communicating externally – I believe the problem is magnified internally. I don’t think it’s a stretch to say that Yahoo is a mess. Is it due to communication problems? I have no idea. However, without clear vision from the top – how can priorities be set? Managers aren’t sure where to marshall resources. Workers aren’t sure how to best allocate their time.
Research in Motion is another prime example. I remember the first time I listened to one of their earnings call. Their CEO, Jim Balsallie, might as well have been speaking Chinese – I had no idea what he was talking about. I was pleased afterwards when the blogosphere lit up with bloggers saying the same thing. Over time I have learned that Balsallie babbles incoherently to reduce the amount of time available for analysts to ask questions. RIM recently released 5 new phones. Why so many models? Maybe Balsallie’s babbles were misinterpreted by product marketing.
I touched on this concept as it pertains to each of us individually a few months back and I think the ability to explain what you do in a sentence or two is vital in the new Attention Deficit Disorder economy (see: We’re Living in a Sexy World…Get Yourself a Story).
Michael’s come across a new, exciting stock for the Big Data trend, the genesis of his idea was a clear statement of the company’s mission from the CEO on TV. Head over below to hear what and why he’s buying.
Tags: $YHOO $RIMM