25. The Investment Decision Process

What’s in this chapter:

• Why a process is beneficial

• Factors that cause the investment decision process to vary from business to business

• Points to consider and include in the investment decision process

• Typical investment traps that a process can usually help avoid

Analysis for its own sake is not terribly useful; analysis needs a goal. In leveraged finance, the goal of analysis is usually to make a decision about a debt instrument. Often the decision is to buy, sell, or hold, but it can also be whether you should go ahead with a financing.

To reach a decision, you need a process. It can be either an informal one that you go through by yourself, or a more formalized one that involves a committee or team.