Up until the 1990′s, conglomerates were all the rage. Today, it is rare to find conglomerates that haven’t been dismantled (save for the giants like GE that are too big for any LBO firm to digest). Imagine my surprise when I came across Dynacq Healthcare, Inc. (NASDAQ:DYII) a company with a market cap of just $35 million, yet apparently engages in:
- the provision of healthcare management services in China
- the ownership and operation of two (!) hospitals, on either side of the United States (to be sold)
- investing in debt and equity securities (including IPOs)
- venture capital
- investing in “artifacts for resale”
- investing in natural gas stations in China
- sandstone mining
- mined coal trading
- commercial real estate rental
- marketing a cancer marker testing kit in China
It is important to understand the business in which you are investing. If management doesn’t understand their business and value proposition, then how can you?
Author Disclosure: Wouldn’t touch this with your portfolio.