Being a woman investor, one can’t help but think that there are similarities between finding a man and finding a company to invest in. Attraction normally begins with the man’s appearance; his height, his form, his hair – perhaps the twinkle in his eyes. Next set of questions a woman would be curious to know (if we’re honest) would be what he does, including his earnings and assets (for some).
Similarly, for a company, P/E ratio would probably be akin to the first glance. This would be followed by the size, earnings growth, cash flow, debt and assets, basically, all of the usual metrics. Beyond attraction, and knowing the numbers, a woman would usually wish to know whether the man is trustworthy, whether he is straight-speaking about his prospects, what his ambitions are, how hard working and conscientious he is.
You might think that numbers matter, but what good is it if there is no trust? What is to stop him from ‘diluting’ his interest in you and spreading his attention to other women?
What if he is a spendthrift? What if he earns a lot, but spends it on a flashy watch and an expensive car without regard to the future? Or even worse, what if he doesn’t earn enough but spends indiscriminately through credit? A woman would think twice before committing herself to a financially irresponsible man, no?
Ganbatte is a Japanese word that is akin to perseverance, or steadfastness. Or: fight on! It is natural in the course of life that a man encounters hardships, and thus, it is the same with companies. For a man, the ability and ingenuity to rescue oneself from difficult situations is desirable. For a company, this attribute could mean the difference between going concern or bankruptcy. Some of my most satisfying investments have been from identifying turnaround situations.
Dependability is never to be overlooked. If he promises to meet you at 3 p.m., is he normally punctual? It is the same with companies. Companies that are dependable year in and year out tell you how it is in company reports will always hold a premium over other companies. Companies with clear strategies and great business models are highly prized over companies that change their course and tune every time the wind blows a different way or change their name while they’re at it.
The greatest value a man can have for a woman is if he truly cares for her. Taking from that, as an investor, a company that treats its shareholders respectfully, not out to cheat them, and understands that it is a symbiotic relationship not to be taken lightly is ultimately the winning metric in my eyes.
Choosing a company is no different than choosing a man, I think. The only caveat is that while you may fall in love with a man, you must never, ever fall in love with a company.