If, for example, due to miscalculation of its growth plan, a company lost its credit rating in a down turn, it would be hard to borrow more. It is like when you can't pay off your credit card dues in full, then no bank will ask you to apply for a card, but when you are not borrowing, you'll get one application form per week. Many companies are licking their wounds now, so their outlook is not clear. Similarly, in the past correction, many have suffered from sever loss because of margin calls, failing to recover with the market rebound.
By playing the market, through thick and thin, one may learn some skills of running a business, such as how to manage cash reserve, how to manage risk and when to make an all-out attack etc. I feel that the situation is a little murky at this point. |
