Hello Jibran,

It is my opinion that the famous 'site visits' touted by many investment management firms do not occur with the frequency indicated by company marketing departments. That said, I have done my fair share.

When I was a junior analyst I accompanied a portfolio manager on our site visits. This usually entailed a meeting with management in their offices. Occasionally we would ask for a tour of their operations. Obviously what you would see on these site visits depended on what type of company you were visiting. Manufactures might show you one of their factory floors; a natural gas company might take you to the wilds of Wyoming and show you some of their working wells; a consulting firm would show you their state of the art IT facility; and so forth.

I don't think it is possible to ever have the level of understanding of the people that do their work every single day (per your ISO expert question). Someone that has operated a metal press for 25 years will always understand nuance much better than the smart and diligent analyst. This makes investors particularly vulnerable to the claims of management. Which is one of the reasons that trust is so important in the investment business.

In the years that I did the site visits I never saw anything untoward. In part, that's because the company knows that you are coming and you are visiting as their guest. So they can show you whatever they want to show you. In part, I think it is also the case that firms that lie, also lie about other things, and you can catch this in their financial statements, conference calls, press releases, and so on if you are shrewd. That said, on my various site visits the one time I was disturbed by the sumptuousness of the offices of a company that, at the time, had never made a single dollar of profit. This stark contrast was a strong indicator of hubris on the part of the company. Not surprisingly I caught that same firm committing fraud in their financial statements, too.

I cannot speak about other firms because I spent my career at the same company and the business is so competitive that competitors do not talk to one another about their advantages.

With smiles,

Jason