Customer Reviews

Do Business with People You Can Trust: Balancing Profits and Principles

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Laura Rittenhouse has done us all a great favour in her book "Do Business with People you can Trust". It should be required reading for all CEO's and corporate communicators. At last we can see the propects for creating shareholder value by full and honest disclosure and she has created a useful technique for assessing the value (or lack of it)implicit in the shareholder letters published by CEOs.
All those who have had the uneviable task of writing reports or letters to shareholders know the temptations of the fashionable phrase or the piece of internal jargon. They are easy to write and get the job done - but we should all learn to stand back and ask "exactly what does that mean?"
Disclosure requirements are increasing in all countries but no amount of rules or legislation will prevent the use of meaningless phrases or words. The author helps us understand what works and what doesn't.
I only have two suggestions for improvement. First, I think we are benefiting here in the UK from additional disclosures about risk management and many companies are now reporting on the major risks they are taking and how they manage them. More on that would have been helpful. Second, She has focused on the "goodies" strongly represented by Berkshire Hathaway, and the "baddies" represented by Enron. The emphasis on these two companies is heavy and I would have preferred something a little more balanced.
Other than that I enjoyed the book immensely, it is well and intelligently written with a mischievous sense of humour. I hope Ms Rittenhouse will persevere with her theme and continue her analysis for an update in a year or so.

I've read dozens of investment books over the last couple of years, and this is clearly one of the best. It provides a very useful and simple method of improving the quality of the single stocks I buy, and is also a good quick read. I can't recommend it enough, you'll never ignore your annual reports again!

A better name for the book would be "How to find a CEO you can trust". The book focuses on helping shareholders analyze the trustworthiness of their CEO. It is more than just general business principles.

Rittenhouse's basic thesis is that it's best to invest in firms where the CEO can clearly and forthrightly explain what's going on and demonstrates his knowledge of the business. Throughout her book, she gives details on how to analyze the CEO's shareholder letter. (How many people don't know there's one in every annual report?). She uses great concrete examples of good letters (many from Warren Buffet) and bad ones (several from Enron) to prove her points and further explain them. It's very well written, and reasonably short.

Her ideas are critical for individual investors to use. Unlike portfolio managers running mutual funds who limit their viewpoint to the next quarter, we can be more patient. Hence it's particularly important for us to invest in firms for the long haul, and that demands having someone in charge that knows what he's doing, and can effectively communicate it. If a business can't be made understandable to the shareholders, can we assume the CEO understands it? And if he can't communicate it to us, how does he communicate it to the people who work for him?

I've worked on Wall Street for 15 years, and I must admit that the only shareholder letter I read every year was from the CEO where I worked. In that case, this book is also very important, as it provides a way to analyze it and compare the one (or few) annual reports you read against the hundreds that Rittenhouse reads.

After a dozen chapters explaining particular points to look for, Rittenhouse presents a one page score card, which can be used when judging annual reports. It's really easy to use and I very much look forward to using it on the stack I've accumulated.

I found the juxtaposition of Enron's letters with Berkshire Hathaway particularly useful. It helps to demonstrate the central point of the book: If the CEO can explain in clear language how the business is run, it's a good sign. If they can't perhaps it's cause they don't know or would simply rather you not know what's going on.

Thanks to the author for sharing her easy to use recipe for finding firms with good caretakers. As Warren Buffet said, she is really doing the work of angels.

Tru$t should be required reading for anyone interested in leadership, communications or investing. In fact, many Wall Street analysts could offer significant added value in their reports by applying the lessons in Tru$t to their research. My hope is that in subsequent books Ms. Rittenhouse builds on her analysis of success to provide more insight into the art of creating new businesses - or leading any worthwhile organization.

Do Business with People You Can Tru$t involves readers in the possibilities of trustworthy and ethical business practices through entertaining and illustrative analysis of Warren Buffett's Berkshire Hathaway shareholder letters. The premise of this analysis is that these letters do not just represent a unique and interesting form of communication - they are also the best barometers of the qualities of the manager that writes them. This premise is illustrated with examples of how Berkshire approaches its business issues and needs contrasted with other approaches and the relative success of each.

Drawing on examples from extreme ends of ethical spectrum in todays's bussiness world--Berkshire Hathaways and Enron--Ms. Rittenhouse puts forth a compelling argument about the benefits of remaining principled in one's business dealings.

Thanks to this book, I no longer believe that good CEOs must live in an ethical gray area in order to turn a profit in today's business world. This book should be the basis for a complete reevaluation of current accepted business practices.

The author also illustrates how an average person can thoughtfully gauge the ethics of a company through careful analysis of its annual report.

Bravo Ms. Rittenhouse!

The arrogance, greed, and disregard for shareholders so openly displayed recently by a few corporate managers has a negative
impact on the public's faith in what is still the best economic system in the world. Such behavior, if tolerated, can become very
damaging to our system over the long term. It must be reined in at some point and "Doing Business with People You Can Trust" is a
meaningful step in that direction and puts one more nail in their coffin. Everyone who is serious about investing should read this
book!

Several very respected persons in the investment world such as John Bogle, Warren Buffett, Benjamin Graham and a few others
have hammered away for years, both in their speeches and writings, about the very subject of this book. Ms. Rittenhouse has
performed a Yeoman's service bringing to the forefront, clearly and concisely, a subject that has been an irritant to the ethical
investment community for years.

Many respected individuals like those mentioned above, Philip Fisher, and others have consistently attacked the subject of
dishonesty, lack of concern for shareholders, and the incompetence of management, at various times. This may be the first volume
that has been written entirely on the subject, however, and that alone makes it the worthwhile work that it is. I sincerely hope that
the investing public will take the subject of writing to heart and demand a better accounting from corporate management from now on
than they did during the "bubble" years of the '90's.

This book is unique in that it explains to the reader not only "why" it is valuable to read a CEO's letter to shareholders, but also "how" to evaluate the content, efficiency and impact of these letters using Rittenhouse's "Language Works for Business" scoring model. A useful "scorecard" format is also provided for the reader's use.
The explanations of crucial financial concepts such as price/earnings ratio and cash flow are accurate and understandable, without the jargon typical of business books. The review of the many different guises under which "earnings" masqueraded in recent Enron annual reports was particularly interesting. The book is chockful of real life examples from many large public companies to illustrate the author's premise that these letters do provide useful and reliable cues about the values and strategy of the companies, if one only knows the key telltale signs that separate fact from fiction.
This reader found interesting the author's statistical study that tested the correlation of the CEO letter scores to the company's stock price performance. The average per cent stock price change for the 15 top ranked versus the 15 bottom ranked companies was tracked over three two-year periods. The author states, "For example, in the year 2000, the top 15 ranked companies increased an average of 7.4 percent from the beginning of 2000 to the beginning of 2002. Conversely, the prices of the 15 bottom-ranked companies declined 19.3 percent during this same two-year period."
In short, this book is interesting, well-written and useful to the investor and anyone concerned with investor relations.

Ms. Rittenhouse has provided a valuable tool for responsible investors. This book speaks directly to the reader in an honest manner. One never gets the feeling they are being "talked down to". The eye-opening experience of applying the tools to consecutive annual report CEO letters helps one determine if the company is one to be trusted even before looking at the financials. This is a must have book for all investors!

I found this book to be a well thought out wonderfully entertaining totally empowering guide.

Never again will I be intimidated by an investment counselor making reccomendations that ultimately line his pocket. I now have the tools to examine shareholder letters and determine company value. I can cut through the bull... and see the hyperbole for what it is.

Thank you Laura Rittenhouse

This excellent, readable book is for investors, both professionals and family members who have a bit of money to buy a few shares. It spells out how you can judge which companies to trust, and how people like yourself can avoid losing your money in a disaster like Enron's. How? Laura Rittenhouse offers a straightforward answer - read their annual reports carefully! Many are boring and obscure, for sure, but Ms. Rittenhouse offers a great guide to what you should look for, and why. And she should know - she has earned her living as an investment banker and a consultant. What is more, she helps you draw extensively on Warren Buffett's life-long experience.

If you are concerned about ethical investing, this is an important book because it raises ethical issues about honesty and integrity in reporting. If you are not, it is a powerful reminder that ethical attitudes at the top have an effect all the way down a company.

This book doesn't replace your investment adviser or your neighborhood stock-watcher by listing ten or twenty promising firms, though it does tell you whose reports for 2000 were the best and the worst. And Ms. Rittenhouse shows that, on average, companies that write good annual reports have much better returns than those which write poor ones.

The author enables you to check out for yourself the recommendations you get from your adviser, from friends who give you a hot tip, and from newspaper reports. If you invest in mutual funds instead, it shows you what to look for in their reports.

Ms. Rittenhouse explains the technical terms in annual reports simply, and warns that jargon may hide poor results or a CEO who is not sure what is going on. She looks with a shrewd eye at what is said, and what is not said. She tells you briefly, and with very good examples, what you need to know. She supplies rating scales for you to use. This is a hands-on, down-to-earth book.

As a hard-cover book, it is not cheap; but good advice based on careful research never is.

You can read this book quickly, and spend many years digesting and benefitting from all its lessons.

LJ's book is mostly a regurgitation of Warren Buffett's letters combined with a few exerpts from the Enron and other shareholder letters. She's clearly fallen under the spell of the Oracle from Omaha. I wish there were new insights here about evaluating people for business partnerships, but there isn't anything of the sort. Rather, we get a childlike and skin deep analysis of a few shareholder letters spliced into a sparse review of Buffett's letters. Very disappointing.