CPI figures released today increased from 0.8% last quarter to...

CPI figures released today increased from 0.8% last quarter to 1.3% as at 31 December. Annual CPI increased to 3.5% in the December quarter, due to higher dwelling construction costs and automotive fuel prices.

Government stimulus is coming to an end. Wage growth remains stagnant and job security uncertain. To make things worse, I think rate hikes are going to happen sooner than expected. For many people & companies, especially those with massive debt, it's going to be a bumpy road ahead.

What about CI1? Well, with approx $1.9m debt (8% debt/equity) which is not very highly leveraged and approx $2.5m cash on hand I feel we're in a good (not great) position to weather the storm.

What I would love to see in the upcoming annual report (and hopefully future annual reports) is strong free cash flow with reduced (or relatively unchanged) debt obligations. If so, this just further confirms CI1 is in a terrific position to weather a storm.

In fact, in a much better position than most companies they are competing with in the industry. Usually these companies are able to ride out the storm, the stock price can go down dramatically but that's not a permanent loss of capital that we should fear, it's market fluctuations. Eventually the stock price will recover and the fact that the company has a strong free cash flow and no debt it basically means the company's competition has became much weaker during the recession and as a result this company is going to come out of the recession with less competition, or even perhaps acquired some competitors, and is now in a much stronger and dominant position before the recession.

Now, I'm getting ahead of myself here but just trying to make a point. Bottom line is, think about how will CI1 fair better than it's competitors during a recession and eventually come out stronger?