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If that were so they wouldn't be bankrupt. Leverage works both ways, so to my old fashioned way of thinking there's a lot to be said for not getting over exten
by NeedMoreTea 8y ago
If that were so they wouldn't be bankrupt.
Leverage works both ways, so to my old fashioned way of thinking there's a lot to be said for not getting over extended. Leaving some profit on the table beats shutting down.
- TheSpiceIsLife 8y agoIt depends. If the shareholders continually vote for a board that over extends, then the circumstances change and either a) profit! everyone retires early, or b) the share price collapses and everything turns to shit. Either way the board members will probably okay, and most of the shareholders probably didn't have their live savings all in that particular company. I guess this is why investing is a risk vs reward trade-off. If you're of the opinion that leaving some profit on the table beats shutting down, then you probably want to invest heavily in blue chip stocks. Others might have a different risk preference.