I posted last w/e about Universe Group (UNG:LN), having first used it as a bit of a blind stock valuation challenge. If you’re ever bored waiting for some news on a stock, just write a blog post – all too often, news will pop within days..! In this case, a Placing was announced just two (working) days after my post, wow! Which reminds me – note to self:
I Must Remember: If you find yourself saying something like ‘I can’t imagine management would do X…‘, you can be reasonably sure they’ll actually do X¹!
I Must Remember: Most management are agents, not owner-operators – they (always) believe in raising/utilizing cash to expand the business².
I Must Remember: Management’s compensation is usually far more rewarding than the impact of a rising/falling share price – again, they’re not owner-operators. Their compensation also generally grows with the business… Therefore, expansion at all costs is usually far more important than share price, or intrinsic value per share.