No. of Recommendations: 2
Their future might be fantastic, but I am reminded of the "base rate" rule. By default, assume that the return from any type of investment will equal the historical average for that type of investment. To whatever degree you expect a given situation to be exceptional relative to that average, demand evidence of exceptionality that is itself commensurably exceptional.
It's a strong argument, no doubt. You could probably make it for Canadian companies in general, optimism notwithstanding. And what was the Buffett quip about turnarounds? The trouble is, they usually don't turn? Ok, here it is:
" Both our operating and investment experience cause us to
conclude that “turnarounds” seldom turn, and that the same
energies and talent are much better employed in a good business
purchased at a fair price than in a poor business purchased at a
bargain price."
I guess I'll probably watch at a distance, unless my optimism overcomes my reason.
dtb
