In short, there is good chance that several hallowed Biglaw firms, particularly
those with weak balance sheets, will cease to exist sometime in early to mid 2009.
When risky assets are held by
those with weak balance sheets, it is a recipe for disaster.
Ideally, with this data, one could identify where market players
with weak balance sheets are overexposed to risks.
Looking at the middle graph, short - covering isn't that common yet through 8/14, but the rapid price move since then has likely had some shorts
with weak balance sheets covering their trades.
Wait and let the homebuilders and mortgage finance companies run up, and then when momentum fails, short a basket of the stocks
with weak balance sheets.
Many of the companies defaulted 2000 - 2002, and enough came under severe stress, that
those with weak balance sheets kicked them out at the wrong time, for fear of their possible insolvency.
When Weak Balance Sheets Outperform the Strong The market has richly rewarded investors in many companies
with weak balance sheets — those that have relatively high debt loads.
Thus, when you see financial firms
with weak balance sheets taking on significant credit risks, be wary, it is often a sign that the credit cycle is about to turn.
In a recent article, Invesco Fund Treads Risky Path as Major Investor in Distressed Corporate Debt, it is mentioned that Invesco PowerShares's BKLN has major exposures to companies
with weak balance sheets.
But the difficulties of dealing with bad decisions
with a weak balance sheet kills a lot of hedge funds.
If you donâ $ ™ t mind taking on even more risk, you can spice up your portfolio with high - yield bonds issued by companies
with weaker balance sheets.
Not exact matches
S&P said in March a rupiah exchange rate of 15,000 a dollar is «the psychological level» at which companies
with weak balance -
sheets could struggle
with repayments and those
with good cashflow might start to proactively restructure their debt.
«As a startup
with a very
weak balance sheet compared to some of the bigger chemical players, most people wouldn't want to do business
with us without the support from someone
with a big
balance sheet.
A significant share of the corporate debt in stressed economies is now owed by companies
with weak debt servicing capacity and this could negatively affect bank
balance sheets and cut into profits, it added.
With household and government
balance sheets still weighed down by a large debt overhang, demand for new loans is extremely
weak despite near zero short and long term interest rates.
Amid weakness, reinvest in companies
with weak performance that you know are essential,
with good
balance sheets.
Do not try this
with companies that have
weak balance sheets that might be forced to try to raise funds (at unattractive levels) if their plans don't go right.
This year, stocks of companies
with the strongest
balance sheets have markedly lagged shares of firms
with the
weakest financials.
The company's tackled some necessary restructuring, invested in new product development, boasts a strong
balance sheet, potentially could double current operating margins, and a
weak euro adds a powerful new tail - wind (
with Brexit posing zero threat).
I own Johnson Controls (JCI: NYSE) and Magna International (MGA: NYSE), two companies
with strong
balance sheets that are picking up market share against
weaker competitors.
Once perceived as relevant only to the financially
weaker party in «bet the company» litigation, there are now countless examples of major corporations
with strong
balance sheets recognizing the benefits of using non-recourse litigation finance, structured either around a single claim or a litigation portfolio.