Re: [CANSLIM] Management Ownership/Fund Ownership.

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Management Ownership/Fund Ownership.
Date: Tue, 23 Apr 2002 08:57:40 -0400

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Dave,

Management ownership is a tale of two cities (or environments). The ideal is
where the management is also the original founding fathers (or mothers, to
be politically correct), believe in their business model, concept, marketing
strategy, etc. They work 18-20 hours a day, six or even seven days a week,
making the company a success. They would have to have a gun held to their
heads before they would let go of one more share. Hopefully, they have a
good investment banker that knows when to hold that gun to their head, and
make them diversify a small portion of their net worth.

The second scenario is where the management team is in place primarily to
get rich. They are interested in short term success, and bailing out with
nice gains. While they enjoy fat salaries, they are more interested in what
they can do with their stock options.

Telling the two apart is difficult. Some clues I have developed over many
years. Do they exercise options only upon threat of expiration, or as soon
as they can? What attitude do you get from the receptionist when you call?
Is she/he happy there? What sense do you get talking to someone below the
level of the CEO (is he/she feeling secure, or working on a resume as you
speak?), what do the employees think of management (this is a hard one, and
may take several phone calls and time to build a rapport),

The worst scenario is where you get a mixed picture, top drawer management,
dedicated to building the business, but knowing nothing about the stock
market, and accepting the advice of an investment banker more interested in
inflating his own revenues than in helping along an expanding company.

Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
- ----- Original Message -----
From: <Davellil5@aol.com>
To: <canslim@lists.xmission.com>
Sent: Monday, April 22, 2002 9:58 AM
Subject: Re: [CANSLIM] Management Ownership/Fund Ownership.



In a message dated 4/20/02 8:08:09 PM, dfcameron@yahoo.com writes:

<<
 >>

WON says the more management ownership of stock the better.  I don't follow
that rule.

I had a stock that was 50% owned by two founders.  At one point, they
decided
to liquidate a large part of their holdings to finance some new venture.
This is not surprising.  People who found Companies are enterprisers.  They
may liquidate in order to found new enterprises.   I took a pasting.

My limit for close ownership is now 20%.

Regards, Dave

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