HighCom Limited

ASX:HCL

HighCom Limited

ASX:HCL
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$0.160 (+6.7%)
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#401
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Reports (1) My Report Forum Investors
Forum Topics HCL HCL Ouch!

Pinned straw:
Rocketrod
Added 10 months ago

As a rather disconsolate owner of HCL shares, I'm with @Noddy74 regarding any ASX listed company that has Scott Basham at the helm. Not unless I want to turn a large fortune into a small fortune.

So as I was licking my wounds this morning, I dragged out a copy of an article by Ian Cassel I kept just for such occasions. Attached is a copy for those who haven't read it, or those who like me, need to be reminded.

https://mail.google.com/mail/u/1/#inbox/FMfcgzGwHxvsmSdXkClcBGcZQlpmslbc

Ian says you should only average down when:

  1. The business is accelerating.
  2. The business is profitable with no financing risk. 
  3. The business has a sustainable growth trajectory. 
  4. The business doesn’t have a lot of debt. 


HCL does not satisfy all four questions, so accordingly, I won't be averaging down.

Perhaps it's the Endowment Effect clouding my judgement, but my thinking is that if the f!&@ up can be put squarely at the feet of Scott Crash 'em, then a new CEO could, in due course, could get the business back on track.

Or is it a case of thesis broken, time to look for greener pastures?

I'm really bad at hanging on to stocks instead of cutting my losses, so would welcome comments (not advice) from wiser Straw heads
Rick
Added 10 months ago

@Rocketrod I got out the first day I could after the earnings downgrade, at a significant loss to my cost price. I’ve already explained my reasons in this forum. In a nutshell, I lost trust in the management. When I lose trust in management I just don’t want to be there. Trust is something that is earned over a long period of time. I believed in their story (almost) and my thesis evaporated overnight.

I don’t beat myself up in these situations. We’ve been taken for a ride! You can’t get them all right. I’ve moved on and invested what’s left in other opportunities with better prospects. Out with the old, in with the new, and onwards and upwards!

26
Rocketrod
Added 10 months ago

thanks @Rick for the clear, unambiguous counsel.



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