At Blackwattle Investment Partners, we believe in sharing the stories behind our mistakes because these lessons drive both personal and professional growth.
Rather than shy away from mistakes, we embrace them as learning opportunities.
Episode 3 – Digging Deeper: RCR Tomlinson
Here’s a story from our Managing Director Michael Skinner and one of the key investment mistakes that he made during his own career.
In 2018, Michael made an investment mistake that left a lasting impact on how he approaches decision-making in markets. He invested in RCR Tomlinson, a mining services company with a history spanning 120 years.
Despite constant reassurances from management and the Board, a miscalculation in their solar energy projects led to their ultimate downfall.
The company underestimated rock hardness, leading to massive cost overruns and an emergency need for capital. Almost a month later, that capital was gone, and so was the company.
Key takeaways from this experience:
- Question Everything: Management teams make mistakes. It’s important to dig deeper and never assume that surface-level information is enough.
- Challenge Assumptions: No matter how uncomfortable, challenging what you hear ensures that you fully understand the situation, especially in complex industries.
- Transparency is Key: Businesses must be open about their challenges. When issues are hidden, it’s a red flag.
As investors, we need to demand transparency.
This lesson is foundational to Blackwattle’s approach today. We relentlessly pursue quality in businesses, but we also know the importance of asking tough questions and constantly improving our investment processes.
