O'Reilly logo

Value Investing: Tools and Techniques for Intelligent Investment by James Montier

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 26. Bad Business: Thoughts on Fundamental Shorting and Value Traps[26]

  • In his excellent book, Why Smart Executives Fail, Sydney Finkelstein identifies seven traits that poor management tends to display. I've called these the 'seven habits of highly defective managers'. In essence, poor managers see themselves as dominating their field, identify exceptionally closely with the firm, appear extraordinarily decisive, won't tolerate dissent, love being the face of the company, refuse to recognize any problem as more than temporary, and never hesitate to return to their past triumphs in terms of strategy.

  • Many common behavioural traits seem to underlie these failures. For instance, overconfidence, confirmatory bias, conformity and self-serving bias all align closely with the habits that Finkelstein outlines. Perhaps analysts would be well served to conduct a behavioural audit of the management they cover.

  • Intriguingly, there is now a relatively ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required