Revlon is likely the first of many firms to declare bankruptcy in these difficult times. It is important to separate market action from economic action. While many have been academically trained to hold on to or add to positions during a down market to benefit when "the sun shines again", when the economic fundamentals deteriorate, there is more than just market action. Companies with weak fundamentals can and will disappear as a result of bankruptcies.
The bottom line for the hold or add to attitude is to assure the fundamentals of companies held are sound. This means reasonable leverage, strong earnings, a history of success in navigating economic circumstances, dividends and others. These fundamentally strong companies will "take it on the chin", but survive to "fight another day". Weak companies will hit the mat and stay the 10 count. Fundamental do matter!
Mike Tyson's quote is applicable, “Everyone has a plan 'till they get punched in the mouth.”
Be smart, be well-read, be smart and be successful
