Asset Management Firm Reputation Risk

We’ve had lengthy conversations about risks due to technological change and too much leverage on a company’s balance sheet. We’ve also talked about regulatory risks that face the tobacco companies, as well as the risk associated with owning a company that conducts abnormally dangerous activity (e.g. if Southern Co. has any type of nuclear plant issues, those shareholders are going to be entirely wiped out. That may even be the least of their problems. On the other hand, the scope of legal liability for a firm like Colgate-Palmolive is much more narrow).

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