Leverages buyouts - not convinced...

[v***@yahoo.com]

I just finished reading "How to buy a good business with little or none
of your own money'. Unfortunatel y I am not convinced by the author's
arguments. It seems to take a lot of upfront work and there are so many
risks. How can one have a good gut feeling about buying a business that
has a gazillion variables ? As any entrepreneur knows, often the
smallest glitches can bring large complicated systems to a halt. So
that is why i could never have a good gut feeling buying someone else's
business. The right thing to do is to liquidate it and not try and sell
it so some fool.

I suppose if you do many LBO's you may develop some experience, but we
all have finite lives. And even then no two businesses run the same
way ... Personally I would rather focus on developing new businesses
ideas from scratch .

[NC]

Post by v***@yahoo.com
I just finished reading "How to buy a good business
with little or none of your own money'. Unfortunately
I am not convinced by the author's arguments.

That's quite alright. Warren Buffet once noted that the
idea of value investing does not win converts gradually;
you embrace it either right away or never. Perhaps
LBOs have similar intellectual properties... :)

Post by v***@yahoo.com
As any entrepreneur knows, often the smallest glitches
can bring large complicated systems to a halt.

That's why Haines recommends to buy SIMPLE businesses
with low skill level required of employees. Now that we are
into citing successul investment managers, Peter Lynch
once said that he likes to buy stock in companies that any
fool can run, because sooner or later one will...

You seem to miss a crucial point; debt financing is much
easier to come by if you are buying a business with cash
flows and assets. Bankers like cash flows; failing that,
they'll be content with assets. Bankers DO NOT like
projections of explosive growth...

Post by v***@yahoo.com
Personally I would rather focus on developing new
businesses ideas from scratch .

You can, but try convincing bankers to lend to those...
New business ideas are risky and thus require equity
financing.

Cheers,
NC