How Investors Can Look Beyond the Numbers

Recently, health-care bureau chief Max Macaluso sat down with Motley Fool co-founder David Gardner to talk about the fears that some investors face when analyzing stocks in complex industries. During their conversation, David discussed the importance of getting to know the leadership team behind a company before making an investment, and also talked about ways the average investor can get to know a company's CEO. 

The full version of the interview can be seen here, and a full transcript follows the video.

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Max Macaluso: You talked a little bit about leadership and management. How can the average investor get to know the management of a company, beyond looking at compensation and their biography, and perhaps the occasional interview or conference call?

David Gardner: Right. I think we have an unprecedented opportunity and access to knowing the people who are running the companies, unlike anything anyone could have dreamed of 25 years ago, or 100 years ago.

If you're a leader today in our world ... business, politics, any sphere, you are exposed in a way that was just -- I would say, making up round numbers -- 100 times what the most exposed person 100 years ago was. Step away and look at our age, and it's just crazy true; at least it is in my head. This is one of my working assumptions.

In that way, it's very hard to be a leader because you have to really try to be perfect all the time, and we all know we're human; no one is.

As investors, shame on you if you don't feel like you know who's running this company. You've got everything from videos that you can access for free, of interviews with that person. You've got Googling that person's background. You have other people who have already done that for you, so links to a lot of their past work.

You've got the opportunity to probably follow them on Twitter. You're probably not following them; you're probably following their Twitter guy or gal, but that still says a lot unto itself. You can figure out, some CEOs do actually authentically post on Twitter, and others don't. That might, itself, be an inference that adds to your process of researching that person.

We have unprecedented opportunity, if we really care, to get to know people, almost to cyber-stalk any CEO -- not that I've ever done that, or would suggest anybody do that, and I don't want anybody doing that to me -- but the point is, there's so much transparency relative to what there ever was.

When I started investing at the age of 18, which was now 29 years ago, I could not have even dreamed how easy it is to learn about the people who are in business today. By the way, the good news is -- and this might be another contrarian sentiment, Max -- but I think there are so many good people in business, and business is such a good thing.

Anybody who gives business a bad rap, or thinks that Occupy Wall Street -- which had some really good ideas and roots -- is a really accurate depiction of the business world today, Wall Street is a tiny part of ...

I think there's a lot of things wrong with Wall Street. There are so many things right with almost any product or service that you've bought in the last week, and they probably have proliferated around you, and there are so many admirable people behind those.

Anyway, it's a fun process to get to know who started Twitter, or what does Jeff Bezos think about [Amazon.com] in the next 10 years, or what crazy thing is Reed Hastings going to do next at Netflix?


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