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1/4 Many analysts seem to like complexity - I think they like the intellectual challenge. In my view simple's better. Of passing on Freedom Foods $FNP last year, I said it was a 'more complicated and capital intensive business than we prefer'. https://www.intelligentinvestor.com.au/investment-news/freedom-foods-australias-own/146340
2/4 So it was interesting to hear the FNP chairman say on yesterday's conference call - disclosing $60m of inventory writedowns - that FNP needed to have a 'less complicated product range'.
3/4 Another lesson: management of all companies feed the information they want to directors (and the market!). This isn't necessarily the full and complete information directors or the market need to judge the performance of the company.
4/4 So you really need to trust the top managers in any company you invest in - as the board may not necessarily be getting all the information it needs. It's why promotional managers, high complexity and 'tomorrow' businesses tend to be passes for me.
