Financial Signature

The CEO of a company has a financial signature that even he, his wife and perhaps his mother may not be aware of. The book entitled “The 3 Financial Styles of Very Successful Leaders” written by E. Ted Prince and published by McGraw Hill inspires this posting.

CEO’s and all individuals have management styles that make them suitable or less suitable for certain types or corporate challenges. Traditionally we have viewed them as either turn around artists, take over specialists, stodgy managers or whatnot. Ted Prince has developed another methodology that might help an investor select a company by thinking about the CEO and the management style that he will create.

Venture Capitalist. Do things the hard way. Finds products and services with high value. Lots of crash and burn.
Profiteer. Venture capital lite. Targets high but with few resources invested. Frequently reliable moneymaker.
Buccaneer. Targets high by taking a path no one else has figured out. Scary ride but if it works your ship comes in.
Conglomerator. Buys products and companies with high expenses that are not always offset by high profits.
Consolidator. Middle of the road type who buys good businesses, which are not commodities.
Arbitrageur. Looks for decent risk without huge gambles of capital. Looks to leverage low amounts of capital to make medium sized profits.
Mercantilist. Uses high levels of resources to maintain existing value of products. Will build an excellent sales force but will not improve the products value proposition.
Trader. Buys low and tries to make it on volume. Sometimes it works. Frequently it’s a matter of time and you get caught.
Discounter. Cut the price of your product. Reduce the cost inputs and hope to win. Never a thought on improving the product.
Ted Prince favors the buccaneers, profiteers and arbitrageurs. The book covers how to assess your CEO’s on these criteria’s and therefore assess your investments profit potential.