You know I have been watching bits of the movie “The Big Short” on YouTube. In the movie, there is this character called Mark Baum. Mark Baum, this character is loosely based on the person Steven Eisman.
There is one statement from him which kind of resonates with me (read here):
Do your own homework. I can’t overstate the importance of this. When things start to go bad, speaking to the management of the company may be the worst thing you can do. You can walk away thinking things are okay when in fact they’re not, because seeing outside your own paradigm is sometimes the hardest thing to do. In the big-bank industry from 1995 up until the crisis, every year was basically a good year. Every year, people got paid more, and every year the leverage got bigger. What happened is that the people who ran these firms