by RP » Tue Dec 17, 2002 6:58 pm
Thank you Faheem. Yes, I truly believe that investors, financial or business, generally are excited about future prospects and totally neglect a way to either cash in their profits or to close a failing company. It is understandably very hard. Take this for example. You buy a stock of 100 shares for Rs.100 a piece. You spent Rs.10,000. The share price falls to Rs.70, then 60, then 40. Would you sell? If so at what price? I would say that 90% of the investors hang on to it expecting the price to be back at Rs.100. Here is a case of no exit strategy or one of a poorly formulated one. Au contraire, if the price goes upto Rs. 120 or 140 or 160, still 90% do not sell because of expectation of more profit to come. The former is the case of \"fear\", the latter one of \"greed\". I bet companies are the same though a little different. You treat a company as your own and have a sense of ownership. Anyway, the point is, does an entrepreneur have an exit strategy? Thanks.