TIP679: Quality Shareholders by Lawrence Cunningham w/ Clay Finck
We Study Billionaires - The Investor’s Podcast Network
The Importance of Quality Shareholders and the Limitations of Quarterly Forecasts
This chapter explores the importance of nurturing a community-focused shareholder base, using Berkshire Hathaway as a case study. It critiques the reliance on quarterly forecasts, suggesting that such practices promote short-term thinking at the expense of enduring shareholder value.
Anyone can buy a stock in a public company, but not all shareholders are equally committed to a company’s long-term succes. Today’s companies need quality shareholders, or shareholders who buy large stakes and hold for long periods.
Lawrence Cunningham explains why in his book — Quality Shareholders: How the Best Managers Attract and Keep Them.
When it comes to corporate governance, there is no one better to learn from than Lawrence. He’s the Director of the John Weinberg Center for Corporate Governance at the University of Deleware. He’s also the vice chairman of the board of Constellation Software and a Director at Markel and Kelly Partners Group.
Cunningham has also written a number of other excellent books, including Quality Investing, Berkshire Beyond Buffett, Margin of Trust, and The Essays of Warren Buffett.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro
02:33 - What constitutes a quality shareholder versus other types of shareholders?
17:18 - The edge that quality shareholders bring in terms of their investment approach.
24:37 - How quality shareholders impact the share prices of public companies.
43:02 - What managers can do to attract and retain such shareholders.
43:02 - How quality shareholders view executive compensation.
54:52 - The number one job of the board in delivering value to shareholders.
And so much more!
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
- Cunningham’s books: Quality Shareholders, Berkshire Beyond Buffett, Dear Shareholder, Margin of Trust, Quality Investing, and The Essays of Warren Buffett.
- Email Shawn at shawn@theinvestorspodcast.com to attend our free events in Omaha or visit this page.
- Related Episode: Listen to MI305: Exploring the DNA of Quality Businesses w/ Lawrence Cunningham, or watch the video.
- Related Episode: Listen to TIP330: Warren Buffett w/ Lawrence Cunningham, or watch the video.
- Related Episode: Listen to RWH013: Move Slow, Win Big w/ Thomas Russo, or watch the video.
- Related Episode: Listen to TIP626: Intelligent & Rational Long-term Investing w/ François Rochon, or watch the video.
- YouTube Interview with Brett Kelly.
- Alex Morris’s new book: Buffett & Munger Unscripted.
- Follow Clay on Twitter.
- Check out all the books mentioned and discussed in our podcast episodes here.
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