Thread by @Upper20sStCap

Everyone is talking about $BUR.LN and most of it is discussing whether or not the bear case is correct. That's fine. But I think there is another lesson for investors here that can be generalized across all future investments. This is a great example of "no called strikes"

What I would posit is that when you're paying >3x B/V for a biz that is generally a P/B type of business, you really shouldn't have any tolerance for "hair" on the idea because you're already taking such a big "risk" on the valuation already

So in the case of $BUR.LN we have, on top of this high valuation, red flags around the CEO/CFO being married, red flags around them not up listing from the AIM, the accounting is opaque and game-able, and more. And the result is that when credible credible push back arrives...

Your only defense is to trust the management team, when one of the problems here is management credibility in the first place. So I don't really understand how anyone was long this thing. Let me demonstrate with actual examples from the VIC discussion:

I have highlighted basically this entire message because the whole thing is applicable here. IF YOU FIND YOURSELF WRITING THIS ABOUT SOMETHING YOU'RE LONG, YOU SHOULD BE SELLING!!! Go find a one-foot hurdle rather than trying to leap the Empire State Building.

$BUR.LN

If you have to twist this hard to come up with some math to justify your investment in a financials company that trades at >3x BV, you probably shouldn't be long.

$BUR.LN