By Yale Bock
NEW YORK (AdviceIQ) -- Some of the smartest investments come from spotting the visionary chief executive who turns his company and its stock into gold. But how do you identify such a CEO -- and before the person has time to perform that sweet magic?
As an investor, it is crucial to find companies with great leadership. There are very few leaders of businesses where you can make a $1,000 investment, and 10 or 15 years later the initial capital turns into $100,000 or $1 million. Think of broadcaster Tom Murphy, cable pioneer John Malone, mega-investor Warren Buffett, Starbucks founder Howard Schultz, casino magnates Steve Wynn and Sheldon Adelson and a small number of others.
There are assessments galore of the traits a visionary CEO possesses. For instance, corporate public relations expert Paula Phelan lists five characteristics: having a vision and communicating it to the world; staying on top of operational details but delegating the distracting nitty-gritty work to subordinates; keeping abreast of industry trends; having a strong management team and backing them; and being aware of customer wants and needs.
Another aspect of the great ones is an ability to overcome obstacles. For example, Tom Murphy started out managing one television station with had no broadcasting experience. His financial prudence and acquisitive instincts built that one holding into an empire. He eventually expanded the operation into what became the Capital Cities chain, which eventually bought ABC. In the 1990s, he sold the enterprise to Disney.
In addition, visionary CEOs must do many things at once. Buffett is best known for his stock investing. His Berkshire Hathaway, however, is also a highly successful conglomerate controlling assets ranging from the BNSF freight railroad (formerly Burlington Northern) to insurer Geico. His gift is to sniff out value and find good managers to run his subsidiaries.