Scouting Talent Makes the Difference

Discussion
Apr 14, 2003
George Anderson

By George Anderson


Daniel Barach, manager of the MLT Capital Hedge Fund, told the Cincinnati Business Courier, “The rarest talent is the ability to assess talent.”


That ability to assess talent, many believe, is the reason behind Mr. Barach’s success in the stock market. His fund has outperformed the S&P 500 by 78 percent over the past three years.


According to the magazine report, “Barach approaches investments more like a talent scout than a stock analyst. He can read balance sheets, but gets more out of reading body language. Some look for margin. Barach looks for motivation.”


Two motivators Mr. Barach has hedged his investment bets on are the founders of the Chico’s FAS apparel chain, Marvin and Helene Gralnick.


Mr. Barach said of the two, “I got a feeling that they were very personally invested in making it successful.”


Mr. Barach’s fund invested in Chico’s in 1998. Revenue from then until now has grown from $74 million to approximately $378 million. The companies stock price has also jumped from around five dollars to Friday’s close of $21.60.


Last week, Chico’s announced that same-store sales had risen to 12.4 percent almost five points higher than the consensus estimate.


Moderator’s Comment: How talented are most managers
and executives of businesses when it comes to assessing talent?


In too many cases, the least talented talent assessors
are involved in human resources. Talent is much more than a list of accomplishments
on a piece of paper. Too many, however, who are responsible for recruiting talent
can not see past a resume. [George
Anderson – Moderator
]

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