84 - Would you buy your employer's stock?

Mental Models discussed in this podcast: Scuttlebutt Circle of Competence Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.  Follow me on Twitter and YouTube Twitter Handle: @TreyHenninger YouTube Channel: DIY Investing Support the Podcast on Patreon This is a podcast supported by listeners like you. If you'd like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at DIYInvesting.org/Patron. You can find out more information by listening to episode 11 of this podcast. Show Outline The full show notes for this episode are available at https://www.diyinvesting.org/Episode84 Scuttlebutt Challenge: Your Employer's Stock If your company isn't public, assess it qualitatively or do this work on your spouse's company or where a friend works. If you work for a non-profit or government, do the same. Email me your write-up during the month of July 2020 and I'll send you a response. Questions to Ask / Areas to Assess Assess the industry Assess your company's place in the industry What is the culture of your company like? What is the priority of management? Are they shareholder friendly? Are they employee-friendly? Other concerns? How are capital allocation decisions made? How are CapEx decisions made? Does your company earn high returns on capital? Does it use leverage? In summary: Is it a high-quality business? What are the risks? How would you value your employer's stock? (Write down an explicit intrinsic value) Summary: The company you work for should be the first place you look to begin understanding how to perform scuttlebutt. Investors should analyze their employer's stock as a potential investment candidate. Culture, Quality, and Management are key areas.