Take the First Loss or Drown in Ten

“ADVICE: When you invest in a situation that really gets into difficulty, it is far better to take the first loss instead of struggling as we have in Bevis for fifteen years to try to recoup our original investment. As a result of our attempt to make a success out of this one bad investment, Narragansett invested an ad- ditional $2,340,000 and Narragansett stockholders, through subscribing for rights at $10 per share, put up another $1,000,000 of equity capital. The stockholders, creditors, and Narragansett lost close to $10,000,000 in Bevis. We should have written off that $1,100,000 loan when the company went into receivership. The grief we are going through is unbelievable!”

“It is interesting to look back and see how Narragansett became so heavily involved in many situations by repeatedly putting up more and more money without realizing that we would ultimately reach our maximum before the venture was successful.”