Finding initial red flags - Corporate governance and management issues in Indian companies

I did not find any thread regarding this , so I have created this one. Purpose of creating this thread is to find out and avoid the companies which may have corporate governance issue and bad management. I know that we cant not be 100% sure but at least looking for red flags can help us in reducing our losses.

I started my investment in stock market from 2012 as a beginner with no knowledge of stock market ( with hopes of becoming another warren buffet)…lol…:laughing: after reading few books on warren buffet.
I started learning and in last 7 years I have observed that most of the money which I lost in market were the companies having some kind of corporate governance issues or management was not trustworthy. Luckily , due to diversification I did not went bankrupt :stuck_out_tongue: , but still loss is a loss. I lost my capital in below companies ( this is what I remember , could be few more).

  1. Eros
  2. Tree house
  3. PC Jwellars
  4. Yes Bank
  5. Kingfisher
  6. Atlanta
  7. DHFL
  8. 8 K miles
  9. Meghmani organics
  10. Suder garments
  11. Vakrangee
  12. Talwalkars
  13. Manpasand Beverages

I would like people to share there views on how can we avoid such blunders or reduce our exposure before its too late. Most of the time , stock crashes suddenly after some news comes out and we get stuck in the stock.

Kindly share your views on below points , so that we can try to minimize our losses in future.

  1. What are the qualities of a good management ?
    (till last year , I use to think that yes bank is bank with v good management , until issues came out in public)

  2. How can we trust and verify the financial no.s. ?
    ( Some of the companies in which I have invested were seems to have strong balance sheet that time , but suddenly some news came and stocks got hammered and never recovered e.g. PC Jwellars , 8 K miles etc.)

  3. Can the auditors be trusted ? If not , what is the option for a small retail investors. For many stock
    auditors resigned suddenly and stock was hammered and never recovered.

  4. Assuming we invested for long term , is it wise to stay invested having a huge notional loss , assuming that management will change and things will improve in long term (example , YES Bank) , I don’t know what Long term means here , ( 5 years , 10 years or more than 10 years). How long should we wait for things to revive or we should book losses and look for some other stocks.

Please feel free to add more questions. Moderators can delete the post if they don’t find it relevant to forum’s guidelines.