Here is a hard truth most new investors ignore: When you buy a stock, you aren't just buying a ticker symbol or a digital line on a screen. You are entering a legal partnership with a human being.

You are handing your hard-earned savings to a stranger and trusting them to grow it.

If that stranger is incompetent, arrogant, or reckless, no amount of technical analysis will save your portfolio. At the Relax to Rich Club, we believe evaluating the person in the corner office is the single highest-return activity an investor can do.

Here is the 6-point checklist I use to separate the compounding machines from the wealth destroyers.

Running a public company is brutal. It requires navigating regulations, angry shareholders, and shifting economies. We look for leaders who have "seen the movie before."

If the CEO is new to the industry, or worse, a family heir "parachuted" into the boardroom simply because of their last name, be very careful. We want to see a track record of grooming and legitimate operational success, not just DNA.

In the 90s, bad CEOs chased the "dot-com" label. Today, bad CEOs try to shove "AI" into every press release to boost the stock price.

An effective CEO ignores fads. They are obsessed with the boring commercial realities:

We look for voracious readers who study the market, not cheerleaders who chase trends.

Beware the CEO who claims to do it all. No one is a genius at Marketing, Finance, Operations, and HR simultaneously.

If a CEO is a marketing wizard, I want to see them delegate Finance and Operations to a strong lieutenant. If they try to micromanage every department, they become a bottleneck. Great leaders know their own weaknesses and hire people smarter than themselves to fill the gaps.

This is arguably the most critical skill. How does the CEO spend the company's money? This is called "Capital Allocation."

When a CEO announces a massive new factory or acquisition, do they know the math? We want CEOs who can clearly explain the Return on Capital (how much profit that money will generate). If a CEO says they "forgot the specific numbers" or gives vague timeline answers, run. They are gambling with your money.

Culture is set from the top. A CEO cannot expect factory workers to grind for low wages while they fly a private jet to a weekend party in Monaco.

I look for frugality. A CEO driving a sensible car and focusing on profits sends a powerful message to the sales team. A CEO obsessed with flashing wealth usually creates a toxic culture where management cares more about perks than performance.

Finally, look at their wallet.

We want "Owner-Operators." These are CEOs who have a significant portion of their own net worth invested in the company stock. If the stock drops, they feel the same pain you do.

Hired hands who get a salary regardless of performance are likely to jump ship when things get tough. Founders and owners stay and fight because their future is locked into the firm.

The Bottom Line:

Before you click "buy," spend 15 minutes reading the CEO's annual letter or watching an interview. Do they sound like a showman, or do they sound like a partner?

Tell me: What is the biggest "red flag" you have ever seen from a CEO that made you sell a stock immediately? Hit reply and let me know.

To your compounding wealth,

William