Ladies and Gentlemen,
I am starting a new thread to document the companies that have fallen in recent years (I did not hold any) to see whether we as investors or traders can find lessons learnt in our journey towards the gathering of wisdom.
"People who do not learn from mistakes of the past are doomed to repeat them." (my pet parrot told me this - I call him 'bird brain' and told him he talks too much:
1. HIH - losses over $5 billion. Mismanagement. An example of why Warren Buffett places so much emphasis on management. Remember his three criteria for management? At least two might have been missing.
2. Sons of Gwalia - collapsed during a mining boom! Father - Gwalia. Mother - Unknown. Should have been called "Sons of a Gun". Lessons learnt - when you see two brothers who are lawyers run a company, Be Alert and Be Alarmed.
3. ION - a small cap that had a delusion that it could take on globalisation forces.
4. RMG - had a business model that was never going to work, IMO. Buying bad debts of financial institutions and trying to collect them. If it was easy to collect those bad debts, would the banks sell them???
5. Sam's seafood. Fireman Sam. Uncle Sam. Sailor Sam....... but Seafood Sam?
6. Pasminco - beware high gearing and watch those zinc prices as chicken keeps reminding us. Watch that zinc If it moves the wrong way, shoot it.
Any others? Let's keep this register for posterity.
Watch out for the small caps with big price falls recently. The risk might not be worth it.