Rudi’s View: Identifying Greatness

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Always an independent thinker, Rudi has not shied away from making big out-of-consensus predictions that proved accurate later on. When Rio Tinto shares surged above $120 he wrote investors should sell. In mid-2008 he warned investors not to hold on to equities in oil producers. In August 2008 he predicted the largest sell-off in commodities stocks was about to follow. In 2009 he suggested Australian banks were an excellent buy. Between 2011 and 2015 Rudi consistently maintained investors were better off avoiding exposure to commodities and to commodities stocks. Post GFC, he dedicated his research to finding All-Weather Performers. See also "All-Weather Performers" on this website, as well as the Special Reports section.

Rudi's View | Oct 01 2020

Identifying Greatness

By Rudi Filapek-Vandyck, Editor FNArena

I recently finished reading Good To Great. Why some companies make the leap … and others don’t by US author/researcher Jim Collins.

Admittedly, I haven’t been exactly quick in catching up on the author’s global best-seller research.

This book was originally published in 2001 and has sold more than three million copies since.

As it was, I needed a tip-off from new FNArena team member Mark and a little respite post the August reporting season. Plus the fact that Good To Great is available in bricks and mortar book stores around my neighbourhood.

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Collins’ five-year study in what makes a small group of US companies a better breed than the majority of peers is aimed at helping entrepreneurs and business leaders to see the light. The author has since built a successful advisory & consultancy career.

But there is plenty of knowledge embedded in those 300 pages for everyday investors watching and researching opportunities among listed companies worldwide.

Truth to be told, I think many an investor would do him/herself one gigantic favour in buying this book and absorbing its content, including the finer details.

Collins’ research started in 1996, involved 21 research associates and ultimately took five years, during which 1435 Fortune 500 companies over several decades were analysed, studied, sliced and dissected, interviewed and ultimately mostly rejected. (Note: The Fortune 500 is not static in make-up but is regularly updated).

As such, the study neatly fits in with Arizona State University’s Hendrik Bessembinder’s findings that, when taking a long-term view, most listed companies turn out to be lousy performers and poor creators of lasting shareholder wealth.

Two years ago, Bessembinder found that over the long term, share market gains can be explained through as little as 4% of the best performing stocks in a study that went back in time as far as 1926.


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