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Appelbaum and Batt describe a recognizable playbook: acquire a healthy, cash-generating business through an LBO; load it with debt used to finance its own purchase; extract fees; execute dividend recapitalizations and sale-leasebacks; cut labor to free cash for debt service; and attempt an exit through sale or IPO. If the company fails, the PE firm’s losses are capped at its equity stake while the company and its workers bear the downside.
How in the Hell Did Joann Fabrics Die While Best Buy Survived? It Wasn't Amazon
governance.fyi
I had no idea that bank money cannot safely be used for capital investments. It is entirely true that it ought not to be, but the man who can build a business on small capital and preserve fine distinctions as to the use of the money he borrows is yet to be born. And every banker of experience knows it!
Men and Rubber
Harvey S. Firestone
Thomas Paine, remarking about George Washington, once wrote that there is a “natural firmness in some minds which cannot be unlocked by trifles, but which, when unlocked, discovers a cabinet of fortitude.” Graham seems to have possessed a similar cabinet.
Ego Is the Enemy
Ryan Holiday
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