1929 was a watershed year. After the London stock market crash erupted, the entire world sank into the Great Depression, and governments everywhere were searching for ways to revive their economies.
Bulgaria was no exception, though it was far less affected. The Ten-Year Plan had not yet ended, and jobs were not scarce at home at this point.
Every economic crisis was a process of survival of the fittest: inferior companies went under, while superior ones grew stronger.
Ferdinand's criteria for judging a superior company differed from those of the experts and professors. In his view, the vast majority of companies could become either superior or inferior.
The test was simple: just look at its market capitalization. Take London Pharmaceuticals, for example. By common standards, a company that monopolized penicillin production in this era had to count as a superior company, right?
Yet in Ferdinand's eyes, the opposite was true. London Pharmaceuticals' market competitiveness was indeed unmatched, its internal management system was exceptionally sound, and even amid the economic crisis, its profits still stood head and shoulders above the rest.
But even all those factors combined could not change its nature as an inferior company. The reason was very simple: London Pharmaceuticals' market capitalization was too high!
In Ferdinand's view, when London Pharmaceuticals was valued below one hundred million pounds, it was a superior company. Once its value surpassed one billion pounds, it became a junk asset.
No matter how formidable a company was, one fundamental fact could not be changed: the market was not limitless. Once the market had been developed more or less to its full extent, was there still any value in investing?
Usually, when market development was nearing its end, a company's valuation had also reached its peak. That was when it was time to go