Lessons in Company Investments Lessons from a Money-Losing Investment

The Investment Trap of Niche Companies

One mistake we’ve made more than we’d like is sticking with great niche companies that get bored and start to make acquisitions around the periphery. Each one of them individually doesn’t really bother you, but then you wake up over two or three years and find that the core business is now 40-50% of revenues instead of 80 90% of revenues, the new businesses are not doing so well and now the company has too much leverage. It can catch up to you slowly, but the cumulative effects can be devastating.
Source: http://www.valueinvestorinsight.com/