Mazz, you raise an interesting point. What if I told you to invest a few dollars? And, I said that you would receive a return of tenfold in three years, but you had to leave your money alone for that time. Would you consider that a wise investment? I guess it depends on a few things.
Do you trust in management? Do they have the intellectual capital necessary to achieve success? How do you know? Is it because they have a track record of success operating within a bigger company? Do they know the industry? Do they have a product that has a growing market demand? Is the company moving toward product development and commercialization with some degree of linearity - step by step actions that seem to fall into place, even when there is a delay? Does the business seem well capitalized? Are there revenues and are they increasing revenues over time? Is the organizational development consistent with supporting the belief that the company is capable of achieving its goals? Is debt reasonable? Are their costs consistent with those within the industry and for its product development? Are there partnerships or relationships consistent with a commitment by a third party's faith in the strategies and goals as exemplified by some financial benefits or agreements? How has the company dealt with setbacks? Have they overcome them and, in so doing, are they closer to success? Are there measures of that - agreements with external entities, businesses or governmental agencies to allow the firm to forego certain costs, payments or expenses? Does what is happening seem reasonable and the doubts limited, obvious, and/or have potential resolution? In short, is the evidence consistent with a reasonable belief of success (after all, in all things there is a shadow of a doubt)?
If you had answers to these questions and felt comfortable, would that be a good investment? I think so and it is how I feel about my investment in Elite.
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