Your point of view makes a lot of sense, actually. I should have had this line of thought a little earlier.
Your post, however, doesn't totally ring true for me.
I'm a doctor, and I can appreciate the huge costs of the outfit of an opthalmic practice, (or any practice for that matter). The equipment they use dates quickly. It's a significant barrier to entry. There is also the case of economies of scale - multiple doctors need to work together to lower overheads - eg. admin staff, computers, premises hire etc. However, I do recognise it is better to start one's own practice rather than work for someone else.
As you said "Therefore - VGH was a product of a bull market that relied on constant capital growth to keep the doctors happy and the company profitable. Without that, the business model may well be dead."
I'm not sure that this stock really had capital growth in the first place - it is an income stock, so I would disagree that a bull market was maintaining the company. However, it is hard to see how the stock price would actually grow unless they add more and more doctors - increasing their assets if you like. Yes, as you say it all depends on retaining the doctors they have, and skimming a proportion of their labour for us, the investor. That net profit margin has been 15% or so, and is set to decrease with increased wages to the doctors.
VGH Price at posting:
77.0¢ Sentiment: LT Buy Disclosure: Held
