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The Importance of Management
and New Products

7.1 - New Products, Services or Management

A stock’s price rises exponentially for a purpose – it is usually because of launching new products, new services or due to a change in the management. The price rise takes place because investors view the new products or services to be promising, or the new management to be more dynamic than the existing management. This makes it important to keep up with such developments in order to invest early in such promising companies.

7.2 - Management is the key

You've probably heard about super-executives who rescue companies from the brink of bankruptcy or take them to astonishing heights. Visionaries such as these can be responsible for a powerful stock move. Apple Computer was faltering in 1997, when co-founder Steve Jobs returned to lead the company back into profitability. Under his leadership, Apple shares more than quadrupled over the next couple of years.

Good managers are visionaries, able to redefine business models.

What makes management outstanding? There's more to successful management than inventing the next personal computer or coming up with the next big trend in fast food. The management must also be adept at guiding companies through difficult times, adjusting to changing market conditions, taking advantage of new opportunities. Good managers are visionaries, able to redefine business models. Often, other companies emulate their successful strategies. These leaders demonstrate the ability to deliver on promises, meet growth projections and deadlines, building a reputation for credibility and integrity.

7.3 - Key Points to Remember
  • A stock makes big gains often due to new products or services, or a change in management. But be wary of unproven products, especially if the company’s management doesn't have a solid track record.
  • Superior management is essential to a company's success. That's why sometimes a change at the top pushes a stock's price higher.

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