Below are my reflections and answers to the discussion questions posted at Modern Graham for chapter 19 – Shareholders and Managements: Dividend Policy – of the Intelligent Investor written by Benjamin Graham.
1. What quote from this chapter do you think best summarizes the point Graham is making?
“Shareholders are justified in raising questions as to the competence of the management when the results (1) are unsatisfactory in themselves, (2) are poorer than those obtained by other companies that appear similarly situated, and (3) have resulted in an unsatisfactory market price of long duration.”
2. Do you consider yourself to be adequately active in your management role as an owner of your investments?
3. In your opinion, will the general investor ever become more involved in management?
Sad but true, I do not expect that to happen, even though I hope I’m wrong here.
4. What did you think of the chapter overall?
Not much to say about this chapter. Important issues, even though a more extended discussion would have been great.
Both the choice and evaluation of management, and capital allocation considerations in forms of dividends are very important areas for each and every investor to assess and evaluate, and the chapter provides at least a glimpse of some important things that always should be considered.