Surely you jest...
<<Ever heard of reading the balance sheet, the income statement, ding the ratios, etc.? Combining these with backlog, lack of earnings, and lack of hype you can usually predict the demise of a company just by getting a feel for the numbers.>>
Don: No, I've never heard of that. Please explain it to me? <vbg>
Seriously, though, of course I've heard of it. I do it all the time, but that doesn't mean my financially distressed clients always listen to me. Sometimes I find it useful to walk them through a detailed Altman analysis, which has a prior track record of statistical validity, to break through the denial that often exists amongst the management team and the board of directors.
<<And after all, a company does not need to declare bankruptcy in order to be a profitable short. That's where puts are valuable.>>
Agreed, but I was never intending this thread to be used strictly to ID bankruptcy candidates. I was more interested in using the formula to ID turnaround plays. Obviously, you can make money by either going long, shorting, or using options.
Glad you like the thread. Please conduct an analysis and post the results for the benefit of the entire thread.
Razor |
