09-12-2022, 09:46 AM
This is not a complicated error but something jn the text books called Worsification. It happens when CEOs become ambitious and seek to grow the company. They look for companies to buy to grow quickly in doing so they make less than prudent decisions buying companies with weak financial.
SATS is a company with strong cashflow and rock solid business. It is buying a debt burdened company that has changed hands several times in a business with tight margins and a struggle.
Sometimes i really wonder why such mistakes can be made by highly paid and supposedly smart people....Then we see Temasek losing 300M in FTX believing in a 28yr old with a weird voice.
Avoiding mistakes and being intelligent is too different things. Mistakes are often emotionally driven and skip the logical process. Like Elon Musk buying Twitter for 44B on impulse...then later he realise his instate and tried to wiggle out but could not.
SATS is a company with strong cashflow and rock solid business. It is buying a debt burdened company that has changed hands several times in a business with tight margins and a struggle.
Sometimes i really wonder why such mistakes can be made by highly paid and supposedly smart people....Then we see Temasek losing 300M in FTX believing in a 28yr old with a weird voice.
Avoiding mistakes and being intelligent is too different things. Mistakes are often emotionally driven and skip the logical process. Like Elon Musk buying Twitter for 44B on impulse...then later he realise his instate and tried to wiggle out but could not.