thank you Tong for the nice comment below! and its a great idea to talk about what could make sense for low carbon M&A. It might not be near-term but I like the idea.
Given that management's ability plays such a larger role in total returns, it's quite impressive that the top quartile companies you refer to have been able to sustain continuity of good management as executive teams retire and are replaced with new people, the commodity fluctuates through the cycles, and through the changing regulatory and political landscape. It seems that a key element of top-quartile management is both their ability to navigate the business environment they find themselves in, but also their ability to train and select future top-quartile managers to eventually replace them. I've always been wary of relying on management skill too much over the long run, because even if you get a stellar manager (or team), the inevitable turnover rate means that it can only last so long, and the next group of people may not have their dedication and ability.
100% Investor in the sense that one has to be mindful of management change at a company...even a given team can sometimes get long in the tooth. There is certainly no guarantee a company stays on top. That is what is so impressive about Exxon and Shell over 1910-2010.
Arjun - will you talk about low carbon energy M&A and how to think about it at some point please?
thank you Tong for the nice comment below! and its a great idea to talk about what could make sense for low carbon M&A. It might not be near-term but I like the idea.
I started reading your posts 2 years ago when I just joined the energy sector! It has been such a great education for me :)
Given that management's ability plays such a larger role in total returns, it's quite impressive that the top quartile companies you refer to have been able to sustain continuity of good management as executive teams retire and are replaced with new people, the commodity fluctuates through the cycles, and through the changing regulatory and political landscape. It seems that a key element of top-quartile management is both their ability to navigate the business environment they find themselves in, but also their ability to train and select future top-quartile managers to eventually replace them. I've always been wary of relying on management skill too much over the long run, because even if you get a stellar manager (or team), the inevitable turnover rate means that it can only last so long, and the next group of people may not have their dedication and ability.
100% Investor in the sense that one has to be mindful of management change at a company...even a given team can sometimes get long in the tooth. There is certainly no guarantee a company stays on top. That is what is so impressive about Exxon and Shell over 1910-2010.
It’s always a treat reading your articles. Thanks Arjun.
Thank you Martin. Always appreciate your support!