SGH 0.00% 54.5¢ slater & gordon limited

brily, there are no guarantees in business, failures can and do...

  1. 4,679 Posts.
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    brily, there are no guarantees in business, failures can and do occur.

    I say a primary reflection on SGH is a reminder that when you buy a share you are buying a slice of the company, risks and all. If want guarantees buy treasuries and hold to maturity (though that is not necessarily good either given interest fluctuations and the possibility of inflation eating yield and more) or better still a good old trusty term deposit - then again inflation can eat at that.

    There were no million dollar salaries at SGH. While it is perhaps distasteful the fact remains (arguably) salaries were low comparable to other companies of a similar size and with an international focus. If the argument is executives should be punished by working for nil, or something considerably less than their contract states ,then that is simply not a wise method of turning a ship around. It is needs motivated people not disgruntled people.

    Yes, there are questions that need answering. Some day I expect the picture will unfold as key figures eventually get tapped up by the press.

    Is it not possible that the company simply failed on its strategy, a strategy that was laid out for all to see prior to investing? Could it have been the perfect storm, where opposing parties took advantage of SGHs over stretching with leverage, turning the screw through the market and key revenue sources? That is not to excuse executives, their job is to manage risk, and they didn't, but I don't think it is a crime for taking risks that didn't pan out as intended.

    Prevent repetition in the future. You can't exactly, companies will fail tomorrow as they did yesterday. I am certainly more cognisant now of the risk in companies that over-leverage, perhaps use that as a filter. Do not touch a company that is using too great a ratio of debt to finance growth.
 
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Currently unlisted public company.

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