I have been tough on the poor strategy seen over both of the last two boom-bust cycles, so good to see in Sensible Giants from the Economist that the largest listed firms have disproportionately little debt compared with both smaller listed peers and private firms.
It seems that these large firms are both:
- more able to fight off the stupid urgings of naive analysts who pushed less powerful companies to take on more debt to pursue unsustainable growth, with the implicit threat that they would otherwise be targeted for acquisition, and
- less tempted into the same over-gearing that underpinned the philosophy of the less thoughtful private equity firms.
NEW: