Post Scriptum

Since I (unintentionally) became a member of Defend Bob Nardelli Club, I’ve received many emails telling me that Bob Nardelli didn’t do a great job managing Home Depot (HD). Most criticism is centered around Nardelli switching to using more part time labor which led to less knowledgeable employees, the less than sparkling store appearance and the view that the inventory management system being used is inferior to Lowes (LOW).

Let’s say all these points are accurate and there is a dichotomy between the on-the-surface and under-the-surface operational performances.  But suppose Nardelli lost his job not because he didn’t manage the company well, but simply because the stock didn’t go anywhere during his tenure.  One can argue that if the company was run by a better CEO, HD would command a higher P/E multiple.  But take a look at Lowe’s, it is supposedly a much better run company, but it trades at similar P/E.

Milton Friedman said, “the stock market and economy are two different things.”  I say the stock and an underlying company are two different things too.

Vitaliy Katsenelson

I am the CEO at IMA, which is anything but your average investment firm. (Why? Get our company brochure here, or simply visit our website).

In a brief moment of senility, Forbes magazine called me “the new Benjamin Graham.”

I’ve written two books on investing, which were published by John Wiley & Sons and have been translated into eight languages. (I’m working on a third - you can read a chapter from it, titled “The 6 Commandments of Value Investing” here).

And if you prefer listening, audio versions of my articles are published weekly at investor.fm.

Don't miss new articles

We'll let you know when we publish new articles