Tom Russo: How to Underwrite Family-Controlled Businesses

We are delighted to share with you a Great Investors podcast deep dive, the members-only companion to our free audio program, Tom Russo: The Capacity to Suffer. Each free program in the series is an hour-long narrated profile of one investor. Each deep dive takes one of that investor’s working methods and teaches it to you, in narrated instruction, so that you can run it yourself. This one builds the five tests of family control in eight modules. It is audio only, with nothing to download, so a member who listens on the go gets the whole program. We start with what you will be able to do:

You will be able to take any family-controlled or founder-controlled company and read its control structure from the annual report and the proxy. You will be able to judge from the record whether the controlling owner will spend against reported earnings, name the facts that would disqualify the company, and know, before you decide, what the tests do not tell you. You can run it yourself on any company you are researching, with nothing more than its filings and a calculator, and you can do it before you buy rather than after. What follows is the method itself, module by module.