Gary:
Man, do I agree. I wrote an interesting piece a while ago about that topic. After analyzing a bunch of situations where the bears actually did win, I noted that they ALWAYS had to endure two full years of pain, even after their homework was completed. Our research into this led us to the conclusion that so long as a company had achieved "publicly traded" status AND had acquired institutional stock ownership, they could always pick up a new dollop of dough by telling those "hooked" clients that the business plan had been changed, or the executive suite had been housecleaned, or.....etc.
That idea now figures prominently in our perspective, and I note some other bears have adopted it as a useful thought. Perhaps it works best when institutions have plenty of money pouring in the back door, and perhaps not so well in less blessed periods. Time will tell. I do know that institutions typically hate to recognize a mistake, preferring instead to dump in more dough in the hope that either "things will take a turn for the better", or that they will be able to "off" their positions more easily than would be the case with the company operating under Chapter eleven procedures. (g)
Best, Earlie |
