In this podcast episode, Andrew and Dave discuss "yellow flags" in investing, such as leadership changes, negative events, financial concerns, and slowing revenue growth. They use real-world examples like PayPal, Microsoft, and Square to illustrate the impact on company trajectory and emphasize the importance of observing these indicators for informed decisions.
00:00 Yellow flags could lead to deeper issues.
04:53 Management's job is to allocate capital effectively.
07:39 Gross margins signal company strength and advantage.
12:52 Management's choices, companies as serial acquirers.
15:11 Google's history of strategic acquisitions discussed briefly.
19:28 Competitors pulling ahead, be vigilant and proactive.
23:22 Concern about trend in grocery store performance.
25:53 Changing company mindset and culture takes time.
27:32 Change takes time, need patience for success.
32:01 Management avoiding tough questions raises significant concerns.
34:32 Honesty and accountability build trust with stakeholders.
39:08 Consider impact of employee incentives on shareholders.
41:31 Leaders' diverse backgrounds impact business success profoundly.
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