Letter to Editor

I am impressed by the cover story on guidance regarding the use of 52-week high data for exploring investment opportunities. I don’t have much knowledge and inclination towards technical analysis but I am keen to know how to perform due diligence on the quality aspect of any company? 

- Devyaan Sharma

Editor Responds: Dear Sir, thank you for the appreciating words regarding the previous issue’s cover story. For evaluating the quality aspect, it is important to evaluate the management of the company. Studying the financial results of each quarter is important but it is also critical to analyze the people who fill those financial statements with numbers. A fixed formula doesn’t exist for evaluating management, but some factors should be paid attention to. Some of them can be that the management should possess an actual reason to run a company in the interest of the owners, strong stock performance does not always depict highquality management, another good indicator can be the tenure of service of CEO and top management to the company and the strategy and goals with which the management operates. We hope we have answered your query. Keep writing!