Tim Hanson looked at the list of the 100 top small caps of the last decade and found no evidence that a company's cash/debt position matters. Some had little debt and some had a lot.
All that shows is that successful companies can handle debt. My question is what about the unsuccessful companies? I would hypothesize that if you divided the companies into two groups by their debt load and followed them for ten years, that the group with less debt would be more successful due to some companies failing to handle their heavy debt load.
No comments:
Post a Comment