By Alec Hogg
Since man first walked upright, 107 billion people have lived on earth. Which means for each of the seven billion alive today, 15 preceded us. Men and women who dreamt, thought and mulled over many of the issues which occupy contemporary thought. So Instead of making things up as we go along, it makes sense to learn from those who came before us.
In the world of money, nobody living or dead compares with Benjamin Graham, author, professor and investor – best known today as the mentor of the world’s second richest man, Warren Buffett. In March 1955, a US Senate Committee fretting about the level of the stock market invited Benjamin Graham to address them. Among their questions was how to evaluate management.
His response was classic Graham: “Management is one of the most important factors in the evaluation of a company and it has a great effect upon the market price. (But) It does not necessarily control the value of the company for the long pull because if the management is comparatively poor there are forces at work that tend to improve the management and thereby improve the value of the company.”
In other words, when managers don’t perform, they get replaced. A rule which doesn’t only apply in companies, but also in functioning democracies too. Hope springs eternal.
