[weavie]

> Bottom line: In almost all of the cases above, my advice is to build a war chest of capital so that you can deploy it in the down market.

What I think he is saying is that in a downturn things can get tough if you don't have enough cash to get through it, and it will be harder to raise more money if you need it. But, in a down turn everything also gets a lot cheaper so if you do have the cash then then you can really capitalize on this and emerge from it as the leader in your sector.

[VBprogrammer]

Yeah, I can definitely see the argument for having a war chest. Building it by exchanging a chunk of your equity for it in the hope that on the other side of the storm (what is that old fable about economists correctly predicting 11 of the last 7 down turns?) you can make that back and then some feels a little too much of a gamble. You'd have to be incredibly lucky to get the timing right.

Building a war chest by maximising profitability and minimising costs I could definitely understand.

Perhaps I just don't have the guts for it though.

[weavie]

Perhaps you are a programmer and not an investor so you are going to have a different perspective. (I tend to agree your view btw...)

[rm_-rf_slash]

Big companies often waste too much shareholder money buying back stocks when prices are high. It serves them better in the long run to raise money they don’t need when their stock price is high, so when the market and stock price takes a downturn, they have more capital to allocate for their business while also buying back less expensive stock, rewarding investors doubly once the market picks up again.