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Longtime members may remember Satyam from our 2007 trip to India. You can read what I wrote about the company here:

Looking back at this and at my notes, I was not impressed by the company and was made skeptical by the fact that no C-level officers would meet with us. I'm also glad to know that I was bearish on the company because of forthcoming margin pressures.

Of course, Satyam went on to post healthy margins for the next 16 months, but we know now that this was accomplished via fraudulent reporting. There are a few lessons, I think:

1. It's always worth visiting companies, particuarly foreing companies, on the road. You get a feel for management and you can see them in action.
2. Commodity businesses, of which outsourcing is one, don't have sustainable competitive advantages that would result in stable margins. When one does post stable margins in a challenging environment, it's reason to get skeptical and ask questions,
3. The power of peacocks is insignificant. (You'll have to read the dispatch to understand).

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