8 Steps To Research A Company

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MBA 45 | Research A Company

 

In this episode of Minority Business Access, host Solomon RC Ali outlines the 8 steps you must take when researching a company, and how knowledge helps you invest with your head and not your emotions. From a company’s cashflow and quarterly reports to their ability to gain market share in a crowded space and its management team; learn where to find the information you need to make educated, science-based investment moves. Does a dip in the market or bad news mean you should pull out, double down, or stay the course?

“When people are pulling out, that may be the time for you to buy in or buy more, but you won’t be able to make that decision if you haven’t done your homework or consulted with the right people or sources.” This episode also covers why it is critical to familiarize yourself with a company’s management team before deciding whether or not to invest your money. Lastly, you’ll learn when market volatility can hurt you and when it can help you.

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8 Steps To Research A Company

We look forward to going over some more information. The team has done an awesome job. I have to give them credit. They’re doing everything they possibly can to ensure that you are successful. We need you to go ahead and dig in and do some research and everything on your own so that you can be successful as well. Keep in mind please, success is what you think it is. It’s not what I or someone else think it is. Let’s not get caught up in the labels of what something means or does it mean. Each individual has their idea of what success is. We’re going to talk about investing in a company. We’ve talked about it before on what to look for and how to invest in the company. We’re going to do that again and get a good idea of what we should be looking for and what we should be doing.

“I’m Jimmy. In this video, I’m going to walk through how to research a company and ways we can learn to become a better investor. I plan on starting with the basics and I’ll give ideas along the way for how we can take our investing game to the next level. I’ve been investing for several years. I started investing shortly before I went into college. I then got my Bachelor’s degree, Master’s degree, and I’m working towards my Doctorate of Business with a specialization in Finance. My real love for investing came from when I was young. My father worked on the floor of the New York Stock Exchange. That was my early introduction to investing. That being said, I understand that investing can seem intimidating for people who have never been around it, who have never done it for the first time, or if you’re starting out, the process itself can seem quite overwhelming.”

Success is what you think it is, not what someone else thinks it is. Each individual has their own idea of what success is.

“What I’m hoping to do here is I’m going to break down the actual process I go through whenever I analyze a new company. I believe that if we follow this process, we can all get good at analyzing companies and ultimately picking companies to invest in. If you’re not 100% confident on how to read financial statements, this book is a fantastic place to start. It’s called Warren Buffett and the Interpretation of Financial Statements. I like it because it’s simple. That’s the reason I love this book. It’s quite a small book and it’s super easy to read. Mary Buffett is one of the authors. I think she used to be married to or she still is married to Warren Buffett’s son. Although this is called Warren Buffett and the Interpretation of Financial Statements, I can safely say, after reading it, that this is not a shortcut for thinking like Warren Buffett thinks as far as investing goes.”

“I’m not even saying that’s why I would like the book. What I’m saying is that they do a fantastic job of making it simple. They walk through different key ratios, different pieces of each of the financial statements. It’s an amazing place to start. If you want to learn how to read financial statements like Buffett does, then Ben Graham’s book, Security Analysis, is the place to go. I read that book and I love reading about this stuff. That is a tough book to read. That book took me over a year to read. This one took a couple of hours. It’s quite simple. Let’s pretend that you’re comfortable with the basics of financial statements. You could probably move on to these next steps even if you have just the very basic understanding of financial statement analysis.”

He’s showing the income statement, the cashflow statement, and he’s talking about reading a balance sheet. We’ve talked about that several times on many different episodes and even bringing it forward. Income statements, you have to know what makes up the income statement and why certain things are relevant. The thing that I always look for and spend a lot of attention on is the cashflow. I’m looking always to see if a business is struggling, why is it struggling, are they carrying too much debt or do they have too many expenses. I’m always looking for cashflow. The next thing I’m looking for is what makes up the cashflow. Where is the cashflow coming from? Is it reoccurring business? Is it contracts? Is it like in retail where you have to sell something new to a new customer every single day? I always want to know what makes up the cashflow and how that money is coming in.

MBA 45 | Research A Company

Research A Company: You want to make sure the company you’re investing in is doing what’s normal to the industry but also breaking away from the industry and setting their bar higher.

 

The balance sheet, that’s a pretty simple one. You need to know what makes up the balance sheet of a company. He’s going to probably get into that. I’m going to break in and give you my opinions as he’s given it and tell you what pieces that you should possibly focus on more so than others, and what you might be able to disregard. These are the nucleus when you’re looking at a company. It’s this here, 10-Qs, 8-Ks and K. You’ve got to look at those things in management discussion. Those are the nucleus of making an informed decision into a company because that should give you everything else.

If management has done a good job on their filings and when I say filings, I’m talking to 10-Qs, the 8-K, the 10-K, if they’d done a good job on that, they’ll talk about their competition, what the competition, what the industry and everything is doing, then you know what I normally do, you can do this too. Go pull up some of the competition, especially if they’re public as well, look at their 10-Qs, 8-Ks and compare it and see what’s going on. Even with the financials and stuff like that here, what you want to do is compare and see the company that you’re thinking about investing in, where can they make improvements? Where is it lacking? Where is it falling behind?

You might want to pick up 2 or 3 other companies. The number one company, you always want to stay within number 1 through 5 within that industry, and then you compare everything. You look at it and see. You’ll say, “One company’s balance sheet might be extremely strong? What’s making it so strong?” When you compare it, you’ll be able to see that information. They may talk about in their management discussions certain things that the company you’re thinking about investing in is not talking about. You might see two of the other companies talking about the competition. That might be a red flag and say, “That’s a huge indicator that the industry is going in a particular direction, but the company I’m thinking about investing in hasn’t even mentioned it or talked about it yet.” They should at least mention and talk about it. They may not go in that direction but they may say, “Everybody else in the industry is going over here and they’re expecting to do this, but we’re going to go in this direction. We think we’ll get this particular outcome.” You want to make sure the company that you’re investing in is doing what’s normal to the industry, but also breaking away from the industry and setting the bar higher. Let’s go ahead and go back to the video.

You can learn a lot about a company by digging into the differences from year to year.

On each of the financial statement in the description and you could probably get away with just that for now. The key to becoming a good researcher and, ultimately, a good investor is being able to analyze a company’s business or understand the business itself. Let’s look at how we can learn about the business. If you’re wondering, these are the exact steps I go through for every company that I research, either for work or for when I’m making a video. However I do it, these are the steps. There are eight steps in general that we go through.

Pull Down The Most Recent Annual Report

Let’s pull up any company. How about we start the next company that I’m going to cover for the Dow 30 analysis, Goldman Sachs. The first step is to pull down the most recent annual report, which is called the 10-K. 10-Ks are required to have a certain amount of information in them. One of the requirements is that they have a business description in them. Whenever I start with a new company or even if it’s been a while since I last analyzed the company, I always start with the business description. This is the business description for Goldman Sachs. They break out the segments and what the company does. This one’s about twenty some odd pages. They’re all usually in that area, call it 15 to 20 pages.

The 10-K, that’s the year-end. That’s everything that happened within that twelve-month period. Segments, I must say, you can forget that and toss it. We were always talking operations, what’s going on with the operations. Are they spending too much money? Do they have too many vendors and employees? I mentioned before on another episode, the government puts out how much money the company is producing. How much each employee within that company contributes to that revenue. That’s important to understand and to know. Anytime you make an investment, you’re going to be looking for that. You’ll take the operations and say, “They got X amount. Their payroll is this.” You’re going to look at what that operational cost is and then you’re going to go over that government report and you’re going to say, “These guys got 300 employees and the company is doing less than $300 million.”

That company is doing pretty good because the breakdown is that each employee is contributing to $1 million of actual revenue to the company. Let’s say if you had three million employees and the company was doing $300 million. All of a sudden, that’s not looking as good. That would probably tell you that you have too many employees. The company could stand to cut back on some employees. They can’t do that if they’re not proficient and they don’t have their infrastructure altogether and streamlined. That’s what looking at everything in operations. That’s what you’re looking for. You’re looking to see, “Are these guys running it efficiently? Are they running?” Who are we talking about? We’re talking about the CEO who gives the orders and everything like that to the VPs, the VPs who give the orders to the management team, the management team who gives the orders to the supervisor and the workers who are doing the execution they’re up. Everything has to flow like a well-oiled machine. You’ll find and discover if they are or if they’re not, right here.

MBA 45 | Research A Company

Research A Company: The key to becoming a good researcher and ultimately a good investor is being able to analyze a company’s business or understand the business itself.

 

The other thing is industry. What is the industry doing? What are the top five companies in that industry? I know everybody likes number 1, number 2, number 3, but what are the top five companies in the industry doing? You have to look at the industry, the company that you’re looking to invest in, what are they bringing new to the industry? What do they have that’s a little bit different than those top five companies? That’s important. If everything is the same, then how are they going to gain more market share? What are they going to do that’s so unique within that industry to gain market share?

They’re probably not going to tell you in the industry section, this section called management and discussions. They should be talking about it there. We’re going to get back to the video. He’s doing a good job. I like his method of what he’s doing and how he lays it out. In my opinion, it should make it simple for you to understand it. It’s like what we do at Solomon RC Ali Corporation. If you go to our website, we’re not going to have Goldman Sachs as one of the companies that we’re looking at. We deal with small cap and penny stock companies. The definition of a penny stock for those of you who don’t know is any stock that trades under $5.

It doesn’t matter what platform they’re on. You can have a stock that’s considered a penny stock that’s trading on NASDAQ. If it’s trading under $5, typically they consider it a penny stock. Most commonly, penny stocks are known as stocks that are under $1 that are on the OTC markets or pink sheets. That’s what most people are associated with. The true definition is any stock that trades under $5. It doesn’t matter what platform it’s on. Let’s get back to the video. He’s doing a good job. Let’s find out some more and see other knowledge.

They do a good job, at least Goldman did in this example, of explaining what the business does and how they make money. Many times, when I first started researching a company, this may be as far as I get. If I get through this section and I don’t like the business itself or it’s too complicated, or I question how many prospects they’re going to have over the next few years, then I could stop here. This is an important point because you can bail out on the company at any time. You don’t need a thousand good investments. All you need is a handful of great ones and you can make a killing with your investments. We all need to be picky.

Investing can seem intimidating for people who’ve never been around it or have never done it.

He’s talking to the portfolio investors, people looking to build a portfolio. People, you want to do the due diligence. You hear me stressing that. That is on you. To be successful, it is up to you. All we can do is give you the tools. It’s like if I give you a screwdriver so you can screw a screw in and you decide that you want to use the back of some pliers to do it, you just made your job a whole lot harder, if not, impossible. If you take the screwdriver because you have the right tool for the right job, you made your job a lot easier. That’s all we’re trying to do, is give you the right tools, the right information so you can make an informed decision, but you got to go do the work. The other thing is you want to eliminate the risk. When you do your homework and check out these companies and everything, you’re eliminating or you’re bringing your risk down. That’s very important to bring that risk all the way down. I’m going to hush up and let him go for a little while until we get to a point that is important to make a comment on.

Read The Most Recent Management Discussion And Analysis Section

“What about the companies that we elected to put our money in ultimately? We know what the business does, so now we’re on to step two. We’re going to read the most recent management discussion and analysis section from their most recent filing. If it was their annual filing, the same place you got their business description, great. Otherwise, you have to pull down the quarterly filing, which is called the 10-Q. The business section is usually only in the 10-K, but the MD&A section is usually in every one of their quarterly and annual filings.”

“Sticking with our Goldman example, Goldman’s annual report was filed on February 26th of 2018. In the MD&A section, we’re going to learn a lot about the business, what the management team is trying to do with the business and what their plan is. They might talk about the industry, maybe what different trends that are happening in the industry. They’re likely to break down the financial performance for each of the sectors. They’re going to talk about how the business, as a whole, is performing.”

Number two is critical. The MD&A is critical. You must read this section. There are no ifs, ands, and buts. You need to read this section and you need to read it several times. A good thing to do is take this, see what your team is talking about the company you’re thinking about investing in, look at some other companies in the industry and see what they’re talking about. Another good one is the industry trends, what’s happening in the industry. I’m going to look at my company NewCo, and I’m going to say, “NewCo is talking about these particular trends.” I’m going to run over to its competition and look and see what trends they’re talking about in the same section. What are they saying? What do they believe? I’m going to see if they’re all within line.

ABC might be blowing a little smoke. They might be a little over-optimistic about what they’re trying to achieve, but everybody else is more in line with what’s happening. If the industry itself is only growing by 3% to 5% and ABC is talking about they’re going to grow by X, there’s only one way they can do that. They said they’re going to grow by 30%. How can they grow by 30% if the whole industry is only growing by 3% to 5%? There’s only going to be one way. That means they’re going to have to take market share from the other companies, from its competition. You get to understand really quickly if they have the ability to take market share because you’re looking at it. You’re going to look at their performance in the past. You’re going to look at what they say, “This is what we’re planning to do.” You’re going to go back and you’re going to look at management. You’re going to sit back and say, “Can they do that? They haven’t done it in the past. They’ve been in the business for this long.” Why would I believe that they will be able to take market share from the competition who is outpacing them? It’s very important.

A lot of this is going to come down to simple common sense. It isn’t rocket science. Let me break it down this way. You pick your team. Every one of you has a team, whether you were in high school, college, or you have a pro team. You all had a team. If you went to school, you normally voted for the home team. You look at the stats of your home team, if they had a winning stat and then they were going up against a team that had losing stats, you knew unless something remarkable happened that your team might be favored to win and that they were going to win the game. The other team will have to play exceptionally well. Your team would have to play poorly for the other team to win. It’s the same in business. When you start comparing the management team and what’s happening in the industry, you can now use some common sense. You use some logic and it’s like, “That doesn’t make sense.”

Let’s say, “Solomon can be on both in 100 yards. Solomon has never run better than a 10.0, and both runs are what? 9/1 or 9/2.” It’s common sense. It’s that simple. It’s that black and white. Everyone wants to put more on it than it is. Common sense comes only in though if you do your homework for you to be able to make that decision. If you’re saying, “My friend told me it’s a hot stock in this,” and you go jump in or, “It’s a great company,” and you go jump in, you’re probably going to lose a little money because you threw it to the wind.

We’re going to get back to it. Overall performance is good. When I look at overall performance, what they’re talking about here is the overall performance quarter after quarter, year after year. I don’t look at that. They’re always going to try to put a nice positive spin on it, so it doesn’t sound as bad as it is. What I look at when I say overall performance, I’m going to, who’s number 1, who’s number 2 and who’s number 3? How did they compare overall performance to number 1, number 2, and number 3? I’m not looking at how they compare to themselves. It’s important to remember that. Let’s go back.

Pull Financial Statements Directly From The Latest, Quarterly And Annual Reports

“You might want to update those numbers in your head as you’re reading through the quarterly MD&A section. This kicks us right over to step three, which is onto the financial statements. How do you recommend that we pull those financial statements directly from the latest quarterly and annual reports because these financial statements come with the footnotes? The footnotes can be key to understanding the financials. Often, a company does something unique with a particular line item and in the footnotes, they explain what they’re doing and why they’re doing it.”

Get The Company Presentations And Recent Earnings Calls

“If they were ever going to change an accounting rule or adopt a different accounting rule, we should probably Google what that accounting rule change is. This type of practice can get us good at exposing ourselves to different types of financial statement analysis. The more we look at the actual financial statements, not something off of Yahoo Finance or whatever it might be, who are the actual source? If you have a question about a particular line item, look at the footnotes, they’ll probably explain it there.”

Something that he hadn’t mentioned yet, the management team along with its auditor and professionals that put the financials together have a legal obligation to be completely transparent in the numbers. They have a legal obligation to be completely transparent in the financial statements. The auditor is not just because he liked Joe the CEO of ABC company lets some fluff go. Typically, that’s not going to happen. The CPAs and everything, these people have licenses. Their credential is on the line. Typically, they’re not going to cut too much slack there. Their financial statements have to be completely transparent. That’s what the gatekeepers are there for, is to make sure those statements are ready for investors so investors can make an informed decision either to stay in, get out or buy.

He didn’t mention that so I want you to know that you can place a lot of weight on that, but although you can place a lot of weight, there’s no weight like doing your own homework and comparing that. Even when I look at these financial statements, number 1, number 2 and number 3 in the industry, are these financial statements lining up with numbers 1, number 2 and number 3? What do their financial statements look like? There may be not enough in here. There may be too much. I’m looking for the why. You should be doing the same thing. Let’s get back to it.

MBA 45 | Research A Company

Research A Company: You can bail out on the company at any time. You don’t need a thousand good investments. All you need is a handful of great ones, and you can make a killing with your investments.

 

“I bring up the dates because it’s important to remember if you’re reading the business section and it was from almost a year ago, keep that in the back of your mind. You might want to update those numbers in your head as you’re reading through the quarterly MD&A section. This kicks us right over to step three, which is onto the financial statements. I highly recommend that we pull those financial statements directly from the latest quarterly and annual reports because these financial statements come with the footnotes. The footnotes can be key to understanding the financials.”

“Often, a company does something unique with a particular line item. In the footnotes, they explain what they’re doing and why they’re doing it. If they were ever going to change an accounting role or adopt a different accounting rule, we should probably Google what that accounting rule change is. This type of practice can get us good at exposing ourselves to different types of financial statement analysis. The more we look at the actual financial statements, not something off of Yahoo Finance or whatever it might be, go to the actual source.”

“If you have a question about a particular line item, look at the footnotes, they’ll probably explain it there. Step four is to get the company presentations and recent earnings calls. Steps 2, 3 and 4 can be pushed together or swapped around because, for me on a personal basis, after I read the business section, assuming I still like the company, I go ahead and download everything from steps 2, 3 and 4 all at once because each of these is often interdependent. Sometimes they say the same thing in each of them. It’s a bit faster to download them all at once and start going through them together.”

“Up until this point, we’ve made no attempt to value the company. All we’re doing at this point is getting to know the firm, understanding what they do, how they make money, where their margins, what is their growth rate looks like, do they have free cashflow, how does free cashflow look, what’s management’s plan, do we think that their plan is reasonable and things like that. During steps 2 through 4, those are the questions you’re trying to answer.”

Know Third-Party Information

There’s something I forgot to mention in other episodes including this one, he forgot to mention it as well. Not only we’re going to look at competitors, but we’re going to also look at what the third party is saying. What are the analysts saying about the industry itself? What are other people saying about the industry? At Solomon RC Ali Corporation, we do that as well. We make sure when is the press release coming out, what analysts are saying, what are the trade associations saying about the industry. You want to just not look at the information that they’re putting out or the information the competition is putting out. What is the third-party information being put out there by third-party analysts, by third-party consultants, things of that nature, press releases, business writers, what are they saying? That’s important. Please keep that in mind.

Try Different Valuable Methods

“Maybe I’ll switch you over to that company, to that competitor, because maybe they have a competitive advantage that we identified. What we do is we start this exact same process over with them, but this time, imagine how much easier it’s going to be to understand that business. Read the management discussion over there, because we’re going to know that business so much better. We’re going to know the industry. We’re going to understand the language so much better. The 2nd, 3rd, 4th time we do this for similar companies, the easier this is going to get. Let’s imagine that we still like our company. What we want to do is we want to try different valuation methods. Maybe we tried this kind of cashflow or P/E multiple or EV/EBITDA. There are lots of choices.”

“The more experience we get with different types of companies and valuation methods, the better we’ll get to choose which one is appropriate for that particular situation. This is also where you want to compare the company with its competitors. Compare their ratios and compare the company with themselves from prior years. If management says that they have a particular plan in mind, how long is that plan in place? Are they working on it? Can we see it in the numbers? For me, you can learn a ton about a company with this type of analysis. Digging into the differences from year to year or from company to company can point out a lot. Personally, this is also where I like to find industry associations. Often, these types of groups can do a great job of explaining the industry, the potential of the industry, maybe the projections of the future of the industry. I think that this is great to identify what our company does and what their competitors do.”

Determining fair value, that’s fairly simple. It’s not that complicated, but I want you to keep something in mind, because a lot of people, we have a thing that’s called day traders. Day traders jump into stocks and things of that nature because they hear good news and some exciting things that are going on. They jump in, create a lot of volatility, stock price and everything goes up and then they turn around and talk about management and everything of that nature that management’s not performing.

People, it’s extremely important to understand that when you’re investing, it’s not quarter by quarter. You need to be looking at it long-term because it takes a time to roll out a plan. It takes time to get a plan executed. You can’t go with the highs and the lows of what the roamers or day traders are doing based on, all of a sudden, you get a lot of buying into the stock, so there’s a lot of volatility. You go jump in. You don’t know why you jumped in and then all of a sudden, they’re like, “The company is not worth that because management hasn’t done ABCD as they said.” They will sell it like these people should have done this in the 90 days. It doesn’t work that way. It takes a year sometimes, two years, sometimes even 3 to 4 years to get it done.

Let’s look at Amazon. Have you guys heard of Amazon? Fourteen years of losses. If the day traders are sitting back there and saying, “That’s a lousy stock,” I bet you, they’re not saying that now. I’m sorry. They probably can’t even afford the stock now. That’s what you have to be looking at. You got to do your homework. Everything’s going to come back to it. It’s up to you. If you don’t do your homework, there’s no one to blame but yourself. When we look at fair value, don’t look at what’s happening to the stock or anything of that nature, people jumping in or jumping out. You go do your homework and look at how the value has been determined. Is that by earnings per share? Did they use the discounted cashflow method? There’s a method that these companies are using? Which method is the most popular? Is the management team working on getting it done?

It’s extremely important to understand when you’re investing. It’s not quarter by quarter. You need to look at it long-term.

“Competitors, in their MD&A section or maybe in the business section, or maybe in the earn earnings call, we would’ve come across, hopefully, something about the industry and now, we need to identify competitors. Ideally, 2 or 3 of them. If we could do that, I’m happy. At this point, we know the company well. You know what they do and what they’re planning to do. You understand where they’re going. Once we find competitors, what we want to do is we want to read a little bit about each of the competitors and try to understand what their plan is, what’s their growth rate like, what’s their margin is like, what business line are they trying to go into. Let’s say you see a big difference in margins between one company and another, you could look at why is there such a big difference?”

Start The Exact Same Process Over

“Sometimes, it reveals a competitive advantage that one company has over another. Once you understand the basics of what the competitors do, you pick 2 or 3 and we move on to step six. Now, we want to try to value our company, assuming that we still like them. Sometimes you’ll come across one of the competitors and you’ll say, ‘I like this one better. Maybe I’ll switch over to that company, to that competitor. Maybe they have a competitive advantage that we identified.’ What we do is we start this exact same process over with them. This time, imagine how much easier it’s going to be to understand that business, read the management discussion over there because we’re going to know that business so much better. We’re going to know the industry. We’re going to understand the language so much better so the 2nd, 3rd, 4th time we do this for similar companies, the easier this is going to get.”

“Let’s imagine that we still like our company. What we want to do is we want to try different valuation methods. Maybe we tried discounted cashflow or P/E multiple or EV/EBITDA, there are lots of choices. The more experience we get with different types of companies and different types of valuation methods, the better we’ll get to choose which one is appropriate for that particular situation. This is also where you want to compare the company with their competitors, compare their ratios, compare the company with themselves from prior years. If management says that they have a particular plan in mind, how long is that plan in place? Are they working on it? Can we see it in the numbers? For me, you can learn a ton about a company with this type of analysis. Digging into the differences from year to year or from company to company can point out a lot. Personally, this is also where I like to find industry associations. Often, these types of groups can do a great job of explaining the industry, explaining the potential of the industry, maybe the projections are the future of the industry. This is great to identify what our company does, what their competitors do.”

Future Market Research

Number seven, he didn’t mention it. He did a great job in showing the charts and articulating everything. Here’s the thing. If you see negative news and the stock maintains its course, then you know on that future negative news, you probably don’t want to move. That probably tells you that a lot of the investors in the stock believe in it, have done their work, they’re comfortable with the stock. If you look at it previously and you see negative news and people are jumping out, you got to look at it as 1 or 2 ways probably.

I wouldn’t jump out. I would probably see it as a buying opportunity, but you have to make that decision. One way is you can jump out with everyone else and think the building is on fire. The other way is you can sit back and say, “I’m going to average out and buy me a little bit more while I can pick it up cheaper because I’d done my homework and I’d done all the due diligence. Just because everybody’s getting out on the negative news, I still think management has the capabilities of executing their plan and getting it done.” Keep that in mind.

If you hear good news come out and all of a sudden you know there’s a lot of buying when the good news comes out, you might want to think about sometimes selling a portion of your position because there’s a lot of volatility at that point in time. You can get out while the stock normally tends to go up when there’s more buying pressure. There’s more buying than there is selling. The stock price normally goes up. The good news comes out. You might sit back and say, “Let me take the little profits off the table.” That’s one of the strategies that we use at Solomon RC Ali Corporation. That’s one of the strategies that I personally use.

I will strongly suggest, sometimes when you see good news coming out, you might want to always consistently take some profits off the table so that they can be reinvested at other times. It might be reinvested in the same company later in the future and things like that. That’s buying opportunities. We’re going to finish this off by saying it’s truly up to you. No one can tell you what to do and when to do, no management team and no CEO. All they can do is give you their best guess of what they believe they can do. That’s it. They think they can do a great job. You’re trying to read everything they’re putting out and what the third party is saying. You’re trying to ascertain whether or not you think they’re going to get the job done. You’re trying to give them a grade like a teacher, either they’re getting an, A, B or C or D or F.

It’s not too many of these people who are running publicly traded companies or who are the founders of the companies that are going to get an F. They have to screw it up all the way rarely. That rarely happens. On the other side, they’re going to get an A. When they say they’re going to get some things done, that they’re able to go execute and they always are able to deliver. Most of the people, what you’re going to find is they’re going to be in that B-minus, C-plus range. They’re going to struggle to get some things done because you’re going to have human nature and things like that.

What you’re trying to do is figure out what grade you are giving them and what do you think they can achieve. You want to put on your teacher’s hat. You want to sit back and say, “Is this realistic based on their past experience? Not just with this company, but maybe with other companies that they have worked with. Is this realistic within the industry?” You’re putting on your teacher’s hat to give them a grade. It’s up to you to do the homework.

Thank you, guys, so much for tuning in. It’s been a blast working with you and trying to give you this information. I truly hope you found it to be a great benefit. My team goes out and they do all this research and trying to pick out some good information to help you to do your job better whether you’re a CEO running a company, an entrepreneur looking to get into it, or simply an investor looking to place your money into a company that’s looking to grow. You can reach out to one of my team members or myself at SolomonRCAli.info. If you want to learn anything else, we’re going to continue to try to do the show and bring good content to you that we hope will be a benefit to you. Thank you so much, and it’s up to you.

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