alt Hacker NewsAgain, we have broken higher risk, higher reward.
If you just keep gutting companies with leveraged buyouts, you're not taking on any real risk.
If you're buying up firms that deliver "essential services", you're likely engaging a monopoly. Again, low risk, high reward. A direct violation of the rules of how investments should work. Regulate the monopoly and this goes away.
Do you think losing the equity portion of the investment means no risk? It's not fully debt financed.
And that debt financing bears an interest proportional to the riskiness of the asset's cashflows.
There are lots to hate about LBOs but they aren't entirely devoid of value