“Penny Wise, Pound Foolish”

Great post on evaluating management teams by David Merkel at The Aleph Blog.

A quote:

“Warnings to the wise: always analyze your profit margins in a competitive industry, and if results seem too good to be true, don’t accept them, push back and look at all of the squishier accrual items to see if there is an error.  Bad management teams accept good results without question, and criticize bad results always.  Good management teams criticize unusual results, whether good or bad, but bias income to the low side of fair, allowing small positive surprises to emerge.”


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