Simply put, the potential asset value of the company is not reflected in the book value, and, if operating losses can somehow be stemmed and
a decent return on these assets realized, perhaps shareholders will make out OK.
Not exact matches
Correlation relates to the fact that a low volatility environment encourages investors to move into riskier
assets to get
decent returns on their investments.
In a really large crisis, the
return on risk
assets may look
decent from ten years before to ten years after, but a lot of people get surprised by their need to draw
on those
assets at the wrong moment — bad events come in bunches, when the credit cycle goes bust.
The end result was a collection of capital
assets which are unlikely to ever produce a
decent return on the original investment.
I plan
on holding my PRXI shares for at least another year, but if management isn't able to produce a
decent return on the Titanic
assets, or goes making some crazy investment in a non-core business, I'll know its time to move
on, that is, take my capital and run to the nearest exit.
Correlation relates to the fact that a low volatility environment encourages investors to move into riskier
assets to get
decent returns on their investments.