Bill Bonner: It’s a Mad, Mad World… and Getting Madder

Bill-Bonner2

“Want to make beaucoup money? Start a company. Borrow money. Buy your own shares.  Everybody does that, right?  But our innovation is this: Buy your own products too!  Raise $1 billion by selling bonds to the public. You have no credit and no credibility? No worries. The companies that have done best lately are those with the worst credit.  You have to pay $40 million in annual interest. But you take the $1 billion and use it to buy your products (whatever they are). Your company shows sales of $1 billion. Then, if your shares sell for 20 times earnings (modest for a tech company), the capital value of your company will soar by 20 x $400,000,000 = $8 billion!  Sound crazy?”

http://www.bonnerandpartners.com/its-a-mad-mad-world-and-getting-madder/

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