No. of Recommendations: 0
reverendh, here is a medium-size answer to your first of two questions.

Using OPM - other people's money - actually refers to debt, borrowing that which must be paid back rain or shine, good business or bad.

On a personal scale, the excessive use of credit cards is a counterpart.

On a national scale, an excessive national debt is a counterpart.
On a California scale, an excessive state debt is a counterpart.
(Democrats: Tax and spend; Republicans: Borrow and spend; Common Sense: Receive and spend)

On a corporate scale, an excessive use of credit subtlely presumes that the future will always be like the past (upward and upward), always providing enough income to allow both substantial r&d and debt payment.
[Borrow and Spend].

Almost all the major high-flyers of the 1999-2001 era got trapped in the borrow and spend cycle. The new high-flyers of 2002-03 are much more in the Receive and Spend mode, where most needed funds are provided by revenues and collection of receivables, and moderate-sized new-stock issues.

What do we learn from a bankrupcy? If we learn as we should, we learn to have a much larger "cushion" between our assets and liabilities.
The new high-flyers do not trust debt. They've seen those late 90's high-flyers become stagnant in their revenues and earnings from 2001 to the present, only now starting to break out.

Regarding Foolish Flow, I'm going to make a major post on that probably next weekend. I'll hold off on that, because I'm still preparing what I want to say.

Hope this helps,
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.