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Mental Connections
Some people and ideas have been weaving a quilt of interlaced concepts in my mind recently. Enjoy this quick tour through my mind:
1) I've enjoyed Leandro posting on Commonstock lately (@invesquotes)
2) Innovestor released an interview of Leandro on Substack today
3) I noticed @innovestor is on Commonstock too
4) My favorite part of the interview was when Innovestor asked Leandro:
"How do we, as investors, distinguish between good and bad management/culture?"
@invesquotes replied:
"To assess trust I go to earnings calls that go a couple of quarters back and see what management was promising. Once I know what they had promised I turn to recent earnings to see if they were able to deliver. Great management will promise x and deliver x+y, I always look for this."
5) This made me think of a tool I've seen recently posted about on Commonstock, called Fincredible (I believe @awallis or @gkotak use it to analyze earnings calls quickly).
I've been playing around with Fincredible a bit and it is helpful when doing what Leandro was talking about when comparing past promises to current results.
Example: I was trying to get an idea of whether management was doing a good job executing on NIKE digital memberships.
In Q4' 2020 Nike said: "digital memberships will be a growth driver and differentiator, we'll align our business to make it central to everything we do."
In Q4' 2021 they reported that they hit 300 million NIKE memberships! (a full year early.)
Seeing management signal something is important and then showing follow-through is a great sign. I'll be using this framework to think about management as I continue to research companies I'm interested in.
6) Quick moment of gratitude: Thanks to @invesquotes @innovestor @awallis and @gkotak for sharing ideas and tools that are helping me become a better investor!
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