In reference to Warren E. Buffet Comes to the Aid of a Big Canadian Mortgage Lender by Michael J. de la Merced on June 22, 2017 in the New York Times.
Warren Buffet, a man commonly referred to as one of the world’s most successful investors but how did he get this title? Quick and decisive decision making. He goes in while the confidence is low in a company and desperate for money. He then invests in the company to keep them afloat but with a very steep cost.
A Canadian mortgage lender, Home Capital Group, has hit rough times. They are one of the top lenders in Canada for borrowers with poor credit history and who are self-employed. This company was consistently making high yield loans attracting numerous investors. However, rumors almost closed the company. Ontario Securities Commission accused the executives that they were withholding information from investors because apparently there was an inquiry about fraudulent information in the loans.
This sent investors running and shares in the company dropped a significant 33 percent. As money was flying …