Rescue, timing, quality, vulture

In good times, fortunes are made. In bad times, empires.

So goes the battle cry.

But this is the week where it all hit home. The next big thing is not growth. It’s business rescue. It’s the grind of lists of who to pay. What to prioritise. Fast decisions. Bits falling off.

The stock market is pricing a long haul. Misery. It’s not a time to buy. There is still too much cheer about. This is going to be long and painful.

The value is not in buying cheap shares. It’s in vulture investment. Picking up businesses as carrion. Corpses where you can snatch the body and find a pulse. If you can buy a good business gone bust, and bring it back to life, then you will pay next to nothing and quintuple your investment.

Messy. Dirty. Brutal. Scary. And priced as dead meat rather than living muscle.

I’ve already seen the term sheets of the body snatchers. And they are a marvel to admire. Of awe. Equity control. Submission for the current management team. Removal of any fringe benefits. A high cost for any additional extra support services. Silence on big areas that you can anticipate may crop up – and provide more feeding for the vulture. If you have no room to manoeuvre, you must take the terms.

But they price in the life support system needed to take on risk. Or they move on. You would too. The risks are high.

The great issues to make a success of rescues are timing it. The big WHEN. And quality. There will be a flight to the good things. No point rescuing an old corpse… Save the youngest, prettiest bright things.

Shirts will be lost in over optimism or taking things on too early. And won praying on doom. Bring on the steel-backed vultures. And be thankful.

You have nothing to fear but fear itself. You must out-bear the bears. Or is that out-stare the vultures?

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