incentives
Deeds, Not Words
The rule
Judge people and firms by what they do, not by what they say or their awards. Watch the feet, not the mouth.
Where it flips
A short run of good deeds can be a setup, and a rough patch can hide a sound owner, so recent actions alone can mislead. The fix is to read deeds over a long enough stretch and through at least one hard period, not a single flattering year.
What someone actually does tells you more than what they say, promise or put on a slide. A promoter's real record - cash returned, debt handled, promises kept - shows character that a polished speech and a wall of awards can hide. Watch where the money and the choices go, not where the talk points. Actions cost something that words do not, and that is exactly why they are honest.
A worked example
Two promoters both preach 'shareholder value'. Haridya ignores the speeches. She sees one steadily pay dividends and cut debt, while the other raised new shares three times. She trusts the deeds over both pitches. [illustrative]
How to spot it
- ·A real track record over promises and slides
- ·Cash actually returned versus grand talk
- ·Choices under pressure, not calm-day words
Nassim Nicholas Taleb · Skin in the Game