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Strategies & Market Trends : Value Investing
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To: Bocor who wrote (41074)1/17/2011 9:56:21 AM
From: MCsweet  Read Replies (1) of 78750
 
LPHI,

I looked at this one awhile back. It was a cheap valuation, but I decided not to buy it. The reason at the time was a management and business model that appeared to me to be "ethically challenged".

Here a few general points:
If management doesn't run a good, honest business it can always be subject to legal and regulatory risk. The liabilities of those are hard to ascertain, so it is hard to say how much "margin of safety" there really is.

If management is willing to cheat their customers, then they are probably willing to cheat you too. Just something to keep in mind.

I'd rather not support business that I view as unethical. I have amassed enough wealth (and still find enough opportunities in companies that actually do good) that I can pretty much avoid companies that I dislike.

This has probably cost me some money recently in that I avoided payday lenders, whose economics are great, but who I think are bad for their customers. Money isn't everything, though.

MC
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