Common Stocks and Uncommon Profits – Point Three

How effective are the company’s research and development efforts in relation to its size?

  • R&D needs to be commensurate with the degree of competition and the size of the business. p.54
  • Managers must foster a close relationship between research production, and sales. p.55
  • The goal is to launch products with maximum sales appeal that can be built efficiently.
  • Top management should demonstrate a fundamental understanding of commercial research.  They should promote consistent, focused research.
  • Defense contract R&D that leads to new techniques and principles directly applicable to a company’s regular commercial lines can have great value to the investor.  Their commercial lines are benefiting from the DOD R&D will little or no cost.  p.58
  • Engaging people associated with the businesses and industry is the best way to measure the research program.
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