OK besides looking for low debt in cash rich businesses the next thing you'll want to consider is the
quality of a company's management.
In most cases a company is only as successful as the people running it.
And a big part of value investing is making sure that the business you buy into has a reliable experienced
and forward thinking management style behind it.
One of the key factors in determining whether or not a business is on top of its game is to have a look
at what gives it its competitive edge in the marketplace and whether or not its management team has
an ongoing plan in place for making the most of this competitive advantage.
This means that management is not only acknowledging the competitive challenges that constantly threaten
their company but is adapting and responding to those challenges in a realistic and timely manner to
determine how well a company's management is doing in operating and expanding their business.
You can use some efficiency ratios.
And another great way to evaluate the quality of the management is looking at their companies competitive
advantages.
You need to make sure to the best of your ability that the people you are trusting your money with have
proven themselves as effective decision makers and leaders within their industry will dive deeper into
how to identify companies competitive advantages in the next module.
You know great companies should have great management teams a great management team should focus on
generating growth over time which is the best way to reward long term shareholders like yourself.
So make sure you keep in mind Principle Number four only look for companies that have both strong management
and a sustained competitive advantages and see you in the next video.