no v shape recovery, page-68

Extracting cash out of the debt is critical, the one fixed variable in the profit equation for these guys is how much is paid in the first place. A very difficult conundrum if paying too much to start with.

Buy a portfolio of customers that in optimal scenarios the collector can collect 35 cents in the dollar from. For sure a good collector may collect 35 cents and a bad collector less, but there will be a maximum realistic collection target. The profit outcome is wildly different if paying 10 cents in the dollar (71% gross profit) versus 25 cents in the dollar (29% gross profit). Many businesses have become unstuck from acquisitions of assets at too high prices (just ask some a few companies that got it very wrong and no longer exist....).

All assets can be very profitable, just depends what you paid for them in the first place. Same for buying an onion to resell, a company to earn future profits (when factoring in return on acquisition) or capital gains, or a portfolio of distressed debt. The methods for extracting the maximum value from the particular asset may vary, but the one undisputable fact is that once paid the purchase price is fixed and this factors into the rate of return on the asset.