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Strategies & Market Trends : Fundamental Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: bruwin who wrote (4572)	5/20/2021 8:19:22 AM
From: robert b furman	1 Recommendation Recommended By Lance Bredvold Read Replies (1) \| Respond to of 4719

Hi Bruwin, In 1991, I bought into a Chevrolet dealership with a 20 % ownership. My senior partner had multiple HD truck franchises that were very profitable vs the Chev/Buick dealership his father had started. It was debt free. During the cyclical hard times that the auto business goes through, we bought up 5 separate dealerships. Buying an existing dealership saddles the new buyer with a commitment to build a new facility, usually within 24 months - extendable in hard times. One store we consolidated as a satellite store and ultimately closed it down. Two were sold not long after being paid off (my younger partner was burned out after running it for 23 years and doing a really great job at being conservative and on top of all departments). The funds from those two stores, gave my senior partner the funds to by my younger partner and myself out of the original store (I ran for 28 years) as he placed his daughter in charge. The last store will be debt free by year end. My other younger partner is approaching 65 and has similar desires to not be 100% involved in running the store he has built into a solid growing business. As time has passed, I've always felt to have been very fortunate to buy into a business that was debt free. My senior partner (a brilliant man who taught me much) often said " Be conservative in good times and aggressive in bad times". He would rather floor a million in used cars and have a million in cash. "It's not hard for these businesses to run out of cash" was another of his sayings. He displayed a healthy paranoia about bad times and being bulletproof through them. A business with paid for assets and a cache of cash always gets the very best low cost loans when an expansion is in need of funding. Bankers always love the loans to people who worry about loan repayment more then they do. They compete for that type of a loan portfolio. Lessons learned from life. I have always looked for debt free companies. Currently I have COHU (who took on some debt for an acquisition and has suspended its dividend till regaining a debt free status - hoping by yearend), BRKS, UUUU, AMNF. ALL solid conservative businesses with real products. If you are so inclined, I'd love to see your grid analysis on them. I still have the crib you were kind enough to forward to me but alas, have procrastinated.<smile> Bob