When you marry, how do you know the business is worthy of marriage?
There are very few opportunities on the ASX worthy of marriage.
Conversely, many are more suitable to dating.
If you can adequately guess the sales growth, direction of gross margins, and are just entering a buoyant point in the business cycle, then it’s possible to line up a ‘multiple orgasm’ in the form of multiple profit upgrades / years of strong results which drive re-rating.
Obviously your estimate of intrinsic value & business risks must also be fairly correct.
Why fly over the alps, when it’s more fun to climb Mt Everest & climb down?
